Under what circumstances can Chesters terminate the agreement without an opportunity for the franchisee to cure?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
f ingredients; embargoes, trade restrictions, or other acts of government; explosions, riots, wars, or acts of terrorism; strikes, lockouts, or labor disruptions; and shortages of transportation equipment, fuel, or labor (each, a "FME"). Notwithstanding anything to the contrary herein, if you are unable fulfill your obligations in this Agreement herein due to an FME, we agree to engage in good faith discussions to come to a mutually acceptable resolution; provided that if the parties are unable to mutually agree on a resolution within 45 days of entering into such discussions, we may terminate the Agreement effective immediately. In no case may an FME last more than 180 days.
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- Post-Term Obligations.
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, Chesters can terminate the franchise agreement immediately under specific circumstances without providing the franchisee an opportunity to cure the issue. One such instance is related to the unauthorized transfer of the agreement. If a franchisee's controlling ownership interest or actual management control is transferred, or if they sell substantially all of their assets, it is considered a transfer of the agreement. Should this transfer occur without Chesters's prior approval, Chesters has the right to terminate the agreement immediately upon delivering notice to the franchisee.
Another circumstance allowing immediate termination relates to a failure to resolve issues arising from an FME (failure to meet expectations). If the franchisee is unable to fulfill their obligations due to an FME, Chesters will engage in good faith discussions to find a resolution. However, if both parties cannot agree on a resolution within 45 days of starting these discussions, Chesters can terminate the agreement immediately.
Furthermore, Chesters retains the right to conduct inspections of the restaurant during regular business hours. If the restaurant fails three in-Restaurant inspection surveys, Chesters reserves the right to terminate the agreement immediately. Upon such termination, the franchisee's post-term obligations, as outlined in Section 20 of the agreement, will commence immediately. These stipulations highlight the importance of adhering to the franchise agreement and maintaining open communication with Chesters to avoid potential termination without a chance to rectify the situation.