What is the relationship between the site selection obligations for Chesters franchisees (Item 9) and the franchisor's review and approval of plans (Item 11)?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
Site Selection
We first must approve your site before signing the Agreement, even if you already have a site picked out for the Restaurant. When you approach us, we will give you our site-selection criteria for a Restaurant. Factors we consider in evaluating Restaurant sites include (1) a site's visibility from adjacent traffic arteries, (2) ease of entry from and exit to adjacent streets, (3) the size, density, and income levels of population in the surrounding area, (4) the rental market in the area, (5) types of nearby businesses, (6) projected cost of leasehold improvements, and (7) proximity to another franchised Restaurant or to a Licensed Restaurant. We must accept all sites before you have the right to sign any lease, sublease, or other document for the site. We will evaluate the information you give us about a site. Our review process might or might not involve a physical site inspection. We will not take an unreasonable amount of time to review your proposed site. However, we need not respond within any particular time. We will either accept or reject your proposed site. We will not unreasonably withhold our acceptance of a site but can reject one we consider inappropriate. Although we have the right to accept or reject a Restaurant's location, we will not select or designate a Restaurant site for you. Therefore, you must actively conduct the site-selection process. You have sole risk for your location's business and financial suitability. As noted above, we will not sign the Agreement if you have not yet located the Restaurant's site.
We anticipate that it takes approximately 2 to 4 months after the Agreement is signed and you pay the training fee before the Restaurant is ready to open. Factors affecting this timeframe include construction and remodeling schedules; local ordinance and/or building code compliance; schedules for installing equipment and signs; completing brand standard training programs; delivering and stocking inventory; and other events beyond your control. You must open the Restaurant for business within 180 days after signing the Agreement.
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, franchisees have obligations regarding site selection, as detailed in Item 9, which are directly linked to Chesters's responsibilities for reviewing and approving plans, as outlined in Item 11. Item 9a indicates that site selection and acquisition/lease are franchisee obligations, with references to Items 11 and 12 in the disclosure document. This means that while the franchisee is responsible for finding a location, Chesters has specific criteria and approval rights that impact this process.
Chesters must approve the franchisee's chosen site before the Franchise Agreement is signed. Chesters will provide site-selection criteria, considering factors such as visibility, ease of access, population density, rental market, nearby businesses, leasehold improvement costs, and proximity to other Chesters locations. Chesters's review may include a physical site inspection, and the franchisee cannot sign any lease until Chesters accepts the site. While Chesters aims to avoid unreasonable delays and withholding acceptance, they can reject sites deemed inappropriate, and franchisees bear the risk for the location's suitability.
Furthermore, Item 11 specifies that Chesters will review and approve the franchisee's plans and specifications for the restaurant. Item 8 also states that the franchisee must develop the restaurant in compliance with Chesters's system and ensure all plans meet their requirements, applicable laws, and lease terms. The franchisee must submit all plans and specifications to Chesters for approval before starting construction. This interconnectedness highlights that the franchisee's site selection and development activities are subject to Chesters's oversight and approval, ensuring compliance with brand standards and operational requirements.