What constitutes a default under the Ascentium loan agreement for Chesters franchisees?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
You will be in default under your loan if you fail to make payments in a timely manner; if you or any guarantor become insolvent, file a petition in bankruptcy, make an assignment for the benefit of creditors or admit the inability to pay debts as they become due; if you or any guarantor terminate existence or take any action to cease or wind up your business affairs; you otherwise breach or default under any agreement with Ascentium; or you merge, consolidate with, or sell substantially all of your assets or a majority of your ownership interests to any third party without Ascentium's prior written consent.
Source: Item 10 — FINANCING (FDD pages 23–24)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, a franchisee will be in default under their Ascentium loan agreement under several circumstances. These include failing to make payments on time, or if the franchisee or any loan guarantor becomes insolvent. Default also occurs if the franchisee or guarantor files for bankruptcy, makes an assignment for the benefit of creditors, or admits they cannot pay debts as they become due.
Further default triggers include if the franchisee or any guarantor terminates their business existence or takes action to cease or wind up their business affairs. Any breach or default under any agreement with Ascentium also constitutes a default. Finally, a franchisee defaults if they merge, consolidate with, or sell substantially all of their assets or a majority of their ownership interests to any third party without Ascentium's prior written consent.
These default conditions are typical in financing agreements. Prospective Chesters franchisees should carefully review the Ascentium Equipment Finance Agreement to fully understand their obligations and the potential consequences of failing to meet them. Understanding these terms is crucial for managing the financial risks associated with the franchise.