Is a Chesters on-site employee required to have an equity interest in the Restaurant?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
Your principal owners need not participate in the Restaurant's day-to-day operations, and we do not necessarily recommend that you do so. However, if they do not do so, you must employ a manager to participate in the Restaurant's day-to-day operations. Your manager must devote the necessary time and efforts to supervise and conduct the Restaurant's operation. Your manager and other Restaurant employees must attend and complete our initial brand standard training program to our satisfaction. All who do so will be considered certified in our brand standard training program. Your manager and other on-site employees need not have an equity interest in the Restaurant or you but must agree in writing to preserve confidential information to which they have access.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 34–35)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, on-site employees, including the manager, are not required to have an equity interest in the restaurant. However, the manager must devote the necessary time and effort to supervise and conduct the restaurant's operation.
Chesters requires that if the principal owners of the franchise do not participate in the day-to-day operations of the restaurant, a manager must be employed to do so. This manager, along with other restaurant employees, must attend and complete Chesters's initial brand standard training program to be considered certified.
While equity is not required, Chesters mandates that the manager and other on-site employees must agree in writing to preserve confidential information they have access to. This is a common practice in franchising to protect the franchisor's proprietary information and trade secrets.