Under what condition are transfer fees collectable by Chesters?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
You may not transfer this Agreement without our prior written consent, which we may grant or withhold as we deem best.
If your controlling ownership interest or actual management control is transferred, or if you sell substantially all of your assets, that will be considered a transfer of this Agreement for purposes of our approval rights.
If such a transfer occurs without our approval, we may terminate this Agreement, effective immediately upon delivery of notice.
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, a transfer of the franchise agreement is considered to occur if the franchisee's controlling ownership interest or actual management control is transferred, or if the franchisee sells substantially all of their assets. Chesters's prior written consent is required for any transfer of the franchise agreement, which Chesters may grant or withhold at their discretion.
If a transfer occurs without Chesters's approval, Chesters has the right to terminate the franchise agreement immediately upon delivering notice to the franchisee. This protects Chesters's interests by ensuring they maintain control over who operates a Chesters franchise and upholds their brand standards.
While the FDD excerpt specifies the conditions under which a transfer is deemed to occur and the consequences of an unapproved transfer, it does not explicitly state the amount of any transfer fee that Chesters may charge. A prospective franchisee should inquire with Chesters about the specific transfer fees and conditions applicable to franchise transfers to fully understand the financial implications.