How are amounts received from the Chesters franchisee applied towards their obligations under the equipment finance agreement?

According to Chesters's 2025 Franchise Disclosure Document, all amounts received from the franchisee under the Equipment Finance Agreement (EFA) will be applied towards their obligations to Chesters as Chesters determines. This gives Chesters discretion in how payments are allocated.

This means that Chesters has the authority to decide how the payments made by the franchisee are applied to the various obligations the franchisee has under the EFA. This could include principal, interest, fees, or any other amounts owed. The franchisee does not have the right to specify how the payments are allocated.

For a prospective Chesters franchisee, this clause provides a degree of uncertainty. It is important to understand how Chesters typically applies payments and whether there is any room for negotiation on this point. The franchisee should seek clarification from Chesters regarding their payment allocation policies to avoid potential misunderstandings or disputes in the future. It would be prudent to consult with a financial advisor to fully understand the implications of this provision.