During the term of the Chesters franchise agreement, can I own a noncontrolling interest in a Competitive Business within a 5-mile radius of the Restaurant's location?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in franchise or other agreement | Summary | |
|---|---|---|---|
| q. | Non-competition covenants during the term of the franchise | 14 of Agreement | You and your owners are not allowed to have any direct or indirect controlling or noncontrolling interest as an owner in, or perform services as a director, officer, manager, employee, consultant, representative, or agent for, a Competitive Business at the Restaurant's location or within a 5-mile radius from the location. "Competitive Business" means (a) business preparing and selling to customers breaded chicken products or the other types of products (e.g., "sides" such as potato wedges) that we require the Restaurant to prepare and sell as of the Effective Date, including, but not limited to, such businesses as Charley Biggs, Champs Chicken, Krispy Krunchy Chicken, Cooper's Express, Broaster Chicken, and Chicken King, (b) business that includes a "Restaurant-in-Store" unit where the Restaurant-in-Store unit derives more than twenty-percent (20%) of its revenue from selling chicken, or (c) business granting franchises or licenses to others to operate the types of businesses described in clauses (a) or (b), other than a CHESTER'S Restaurant operated under an agreement with us. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 35–38)
What This Means (2025 FDD)
According to the 2025 Chesters Franchise Disclosure Document, during the term of the franchise agreement, franchisees and their owners are restricted from having any direct or indirect controlling or noncontrolling interest in a Competitive Business. This restriction applies at the Restaurant's location or within a 5-mile radius.
A "Competitive Business" is defined as (a) a business preparing and selling breaded chicken products or other required products like potato wedges, similar to businesses like Charley Biggs, Champs Chicken, Krispy Krunchy Chicken, Cooper's Express, Broaster Chicken, and Chicken King, (b) a "Restaurant-in-Store" unit where over 20% of its revenue comes from selling chicken, or (c) a business granting franchises or licenses to operate businesses described in (a) or (b), excluding other Chesters restaurants.
This means that as a Chesters franchisee, you cannot own any interest, whether controlling or non-controlling, in a competing chicken business within a 5-mile radius of your Chesters location. This restriction also extends to serving as a director, officer, manager, employee, consultant, representative, or agent for such a business. This non-compete clause is in effect during the entire term of the franchise agreement.