Does Chesters reserve the right to require franchisees to buy specific items from exclusive sources?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
up> As of this disclosure document's issuance date, you have the right to purchase the fryers, breading and batter table, hot cases, landing table, and oil-removal caddy you need to operate the Restaurant from us or an unaffiliated third-party food-service equipment supplier. However, we have the right to require you to buy these items from specified exclusive sources (including us or our affiliates) at the prices the source decides to charge.
- 6 We provide a list of approved suppliers from whom you can purchase furnishings, fixtures, signage, and equipment.
- 7 We estimate that the range given will cover initial product inventory and cleaning, office, and general supplies to open the Restaurant.
- 8 You currently must purchase required ingredients to prepare the Chester's menu, including but not limited to breading, fresh poultry, dipping sauces, frozen side items and paper products. We license certain suppliers to prepare these ingredients using our proprietary formulas. The suppliers then sell the Proprietary Goods to our designated distributors, and you must purchase the Proprietary Goods from one or more of our designated distributors.
Source: Item 7 — **ESTIMATED INITIAL INVESTMENT (FDD pages 16–19)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, Chesters does reserve the right to mandate that franchisees purchase certain items from exclusive sources, which could include Chesters itself or its affiliates. Specifically, while franchisees initially have the option to buy fryers, breading and batter tables, hot cases, landing tables, and oil-removal caddies from Chesters or an unaffiliated third-party food-service equipment supplier, Chesters retains the right to require franchisees to purchase these items from specified exclusive sources. The prices charged for these items would be determined by the exclusive source.
Chesters also provides a list of approved suppliers from whom franchisees can purchase furnishings, fixtures, signage, and equipment. Furthermore, franchisees are required to purchase ingredients necessary to prepare the Chester's menu, including breading, fresh poultry, dipping sauces, frozen side items, and paper products, from designated distributors. These ingredients, termed Proprietary Goods, are prepared by licensed suppliers using Chesters' proprietary formulas and then sold to the designated distributors from whom franchisees must purchase them.
It is important to note that Chesters reserves the right to change these purchasing requirements over time. This means that while franchisees may have some initial flexibility in sourcing certain equipment, Chesters can later mandate exclusive sourcing. This could impact a franchisee's costs and potentially reduce their ability to negotiate prices with different suppliers. Prospective franchisees should carefully consider these requirements and the potential for changes when evaluating the Chesters franchise opportunity.