What is the range of license fees that suppliers pay to Chesters on franchisee purchases?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
s). Certain suppliers to our franchisees (who sell directly to franchisees or indirectly through distributors in the supply
chain) have agreed to pay us license fees on franchisee purchases of shortening products, blended proprietary items, paper goods, and signs and promotional items. These fees range from 0.5% to 30% of their gross sales depending on the particular item.
During 2024, we received a total of $37,118,501 from direct franchisee purchases of certain equipment and proprietary food products and from purchases by unaffiliated suppliers and grocery wholesalers to whom we sold certain equipment and proprietary food products for resale to our franchisees. That is 91.97% of our total revenue of $40,358,110. These figures are from our audited financial statements. Our affiliates did not receive any revenue from direct franchisee purchases and leases during 2
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–22)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, certain suppliers pay license fees to Chesters based on franchisee purchases. These suppliers, who sell directly to franchisees or indirectly through distributors, include those providing shortening products, blended proprietary items, paper goods, and signs and promotional items.
The license fees that these suppliers pay to Chesters range from 0.5% to 30% of their gross sales. The specific percentage depends on the particular item being sold to Chesters franchisees.
In 2024, Chesters received $37,118,501 from direct franchisee purchases of certain equipment and proprietary food products, as well as from purchases by unaffiliated suppliers and grocery wholesalers who resold certain equipment and proprietary food products to franchisees. This revenue represented 91.97% of Chesters's total revenue of $40,358,110 for that year. This indicates the significance of these supplier relationships and the associated license fee revenue to Chesters's overall financial performance.