What obligations does a Chesters franchisee have upon termination or non-renewal of the franchise agreement?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in franchise or other agreement | Summary | |
|---|---|---|---|
| i. | Franchisee's obligations on termination/ non-renewal | 20 of Agreement | Obligations include cease operating Restaurant and representing yourself as present or former franchisee; cease using confidential information, Marks, and trade dress; complete de-identification; and payment of amounts due. Also see (r) below. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 35–38)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, Item 17 outlines the franchisee's obligations upon termination or non-renewal of the franchise agreement. Specifically, the franchisee must cease operating the Restaurant and stop representing themselves as a current or former Chesters franchisee. This means they can no longer conduct business under the Chesters brand or imply any affiliation with Chesters.
Additionally, the franchisee is obligated to discontinue using any confidential information, Marks (trademarks), and trade dress associated with Chesters. This includes recipes, operational methods, logos, and the overall aesthetic presentation of the business. The franchisee must also complete de-identification, which involves removing all Chesters branding and signage from the premises to clearly distinguish it from a Chesters franchise.
Finally, the franchisee is responsible for the payment of any outstanding amounts due to Chesters. These obligations are detailed in Section 20 of the franchise agreement. It is important for prospective franchisees to carefully review Section 20 of the franchise agreement to fully understand the scope of these post-termination obligations and ensure they are prepared to meet these requirements should the franchise agreement terminate or not be renewed.