According to the Chesters EFA, what is the Commencement Date?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree to pay us: (a) the number of payments in the amount(s) shown above (each a "Payment") plus (b) a pro-rated payment equal to 1/30th of a standard Payment times the number of days from the funding date of the loan (the "Commencement Date") to the first monthly due date specified by us (the "First Due Date").
The interest rate stated above excludes this pro-rated payment and all fees.
The pro-rated payment is due on the First Due Date, and the first Payment is due either in advance, on the First Due Date, or on the second Due Date, as specified by us.
Subsequent Payments are due on the same day of each month thereafter (the period from the Commencement Date until full payment and performance of your obligations, the "Term").
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, the Commencement Date within the context of the Equipment Finance Agreement (EFA) refers to the funding date of the loan. This date is used to calculate a pro-rated payment. This pro-rated payment is equal to 1/30th of a standard payment times the number of days from the Commencement Date to the first monthly due date.
This pro-rated payment, along with the first regular payment, is due on the First Due Date, or the second Due Date, as specified by Chesters. Subsequent payments are then due on the same day of each month thereafter for the duration of the term. The interest rate quoted in the EFA excludes this pro-rated payment and all fees.
For a prospective Chesters franchisee, understanding the Commencement Date is crucial because it directly impacts the payment schedule and the initial financial obligations under the EFA. It determines when the franchisee's payment obligations begin and how the initial pro-rated payment is calculated. Franchisees should clarify with Chesters how the Commencement Date is determined and how it aligns with the actual start of their operations to avoid any payment discrepancies.