What is the 'Commencement Date' defined as in the Chesters equipment finance agreement?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
Payments: 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 in the context of the equipment finance agreement (EFA) refers to the funding date of the loan. This date is significant because it marks the beginning of the period for which a pro-rated payment is calculated.
Specifically, Chesters franchisees are required to make a pro-rated payment equal to 1/30th of a standard monthly payment, multiplied by the number of days between the Commencement Date and the first monthly due date. This pro-rated payment, along with the first full payment, is due on the First Due Date, or potentially the second due date, depending on what Chesters specifies.
Subsequent payments are then due on the same day of each month following the Commencement Date until the franchisee has fully met their payment and performance obligations under the agreement. This entire period, from the Commencement Date to the fulfillment of all obligations, is referred to as the "Term" in the agreement.