What actions can Ascentium take if a Chesters franchisee defaults on their loan?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
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If you default, Ascentium may, at its election, accelerate and require that you pay all accrued and unpaid amounts outstanding, and all of the remaining payments due under the financing agreement (discounted to present value at the higher of 3% per annum or the lowest rate allowed by law). Ascentium can also take possession of the collateral, sell it and apply the proceeds against what you owe Ascentium after deducting any costs it incurs. You must also pay Ascentium's costs and expenses, including reasonable attorneys' fees, to enforce the financing agreement. If you make a payment late you must pay Ascentium a late charge of 10% of the payment amount (not to exceed the highest rate allowed by applicable law). Ascentium may charge you a return check or return ACH charge of $30 for any payment which is returned by your bank for any reason (not to exceed the maximum amount permitted by l
Source: Item 10 — FINANCING (FDD pages 23–24)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, if a franchisee defaults on their loan from Ascentium, Ascentium has several options. Ascentium can accelerate the loan, demanding immediate payment of all outstanding amounts, including accrued interest and the remaining payments due under the financing agreement, discounted to present value at a rate of either 3% per annum or the lowest rate allowed by law, whichever is higher.
Ascentium also has the right to take possession of the collateral securing the loan. After taking possession, Ascentium can sell the collateral and use the proceeds to cover the franchisee's outstanding debt, after deducting any costs Ascentium incurs during the process. The franchisee is responsible for covering Ascentium's costs and expenses related to enforcing the financing agreement, including reasonable attorney's fees.
Furthermore, if a franchisee makes a late payment, Ascentium will charge a late fee of 10% of the payment amount, provided that this fee does not exceed the maximum rate allowed by applicable law. Ascentium may also charge a $30 fee for any payment returned by the bank for any reason, again not exceeding the maximum amount permitted by law. These terms are detailed in the Ascentium Equipment Finance Agreement, which is an exhibit to the FDD.