![Chester's logo](https://cdn.brandfetch.io/chesterschicken.com/w/128/h/128/fallback/lettermark?c=<img src="https://cdn.brandfetch.io/domain/apple.com?c=1idsvcTjLv919Ax0E2s" alt="Logo by Brandfetch" />){kind=small}
B59/100FDD 2025
Chester's — Litigation & Risk
Food & Beverage - Full Service · FDD Items 3, 4 & 5
Lower Risk
No litigation cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
0
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
59 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Default rate is the share of loans that were charged off or settled for less than the full balance.
Total 7(a) loans
9
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$15.9M
Avg loan size
$1.8M
Participating lenders
8
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Not required
You retain the right to sue in court
Jury trial waiver
Waived
You give up the right to a jury trial
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
No
Franchisor can match any purchase offer when you try to sell
Governing law
Alabama
State whose law governs disputes — relevant if you're not based there
What drove the 59/100 rating
Risk Score Breakdown
- 01MINORUnit count declining 0.9% YoY indicates shrinking franchise system with potential saturation or performance issues
- 02MEDNo average revenue or net income disclosure (missing Item 19) prevents realistic ROI assessment and suggests weak unit economics
- 03MINORExtremely low royalty fee ($800/year) relative to $27.5K-$301.5K investment range signals either underdeveloped support system or franchisor struggling with unit viability
- 04MINORUnprotected territory creates direct competition risk from other franchisees and could cannibalize sales in high-density areas
- 05MINORWide investment range ($274K spread) indicates highly variable startup costs with unclear cost drivers and scalability concerns
- 06HIGHNo 'going concern' statement absent—franchisor financial stability and long-term viability unconfirmed
Severity inferred from FDD text — not a regulatory or legal classification
Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice — consult a franchise attorney before signing any franchise agreement.