What process does Chesters use to assess uncertain tax positions?

According to Chesters's 2025 Franchise Disclosure Document, the company assesses its uncertain tax positions based on the likelihood of being overturned by the Internal Revenue Service (IRS) or state taxing authorities. Chesters has evaluated these positions and determined that, as of December 31, 2024 and 2023, it does not have any positions that it would be unable to substantiate.

For a prospective franchisee, this indicates that Chesters takes a proactive approach to tax compliance and risk management. By regularly assessing its tax positions, Chesters aims to ensure that it can justify its tax filings if audited. This can reduce the risk of penalties or additional tax liabilities for both the company and its members, as the company is a limited liability company where income or loss is taxed directly to the members.

It's important to note that Chesters has filed tax returns through 2023, suggesting that the company's tax filings are up to date. This provides a level of assurance that Chesters is diligent in meeting its tax obligations. A potential franchisee should still consult with their own financial advisors to understand the full tax implications of investing in a Chesters franchise and how the company's tax practices might affect their individual tax situation.