According to the Chesters EFA, what does Chesters irrevocably instruct the secured party to do?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree this EFA may be signed electronically pursuant to the Electronic Signatures in Global and National Commerce Act and other applicable law.
Only the copy of this EFA marked as the "sole original" or similar language by Secured Party or its designee is the chattel paper original of this EFA.
This EFA shall become effective upon Debtor's signature below, provided, however, that our obligation to perform our obligations under this EFA shall be subject to our satisfactory receipt of all conditions specified by us, including a complete and properly executed documentation package, as determined by us. By signing below, Debtor hereby irrevocably authorizes Secured Party to pay the Supplier on behalf of Debtor. The person executing this EFA is authorized to do so, making this EFA valid and binding on Debtor.
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters' 2025 Franchise Disclosure Document, the Equipment Finance Agreement (EFA) includes a clause where the debtor (franchisee) irrevocably authorizes the secured party to pay the supplier on their behalf. This payment represents the funding of the loan provided to the franchisee.
Chesters bases the financed amount on the total estimated cost of the collateral and any financed soft costs, adjusted for any down payments made by the franchisee. This estimated cost is provided by the franchisee or the supplier. If the final actual cost differs from the estimated cost, the franchisee authorizes Chesters to adjust the financed amount accordingly.
Furthermore, the franchisee agrees to execute any documents reflecting these adjustments, and Chesters will provide evidence of the cost changes if requested. The franchisee also represents and warrants that all information provided in connection with the EFA is true, accurate, complete, and not misleading. This arrangement ensures that the supplier is paid directly by the secured party, streamlining the financing process for the franchisee.