What costs does Ascentium deduct from the proceeds of the sale of collateral after a Chesters franchisee defaults?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
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 financing agreement with Ascentium, Ascentium can take possession of the collateral, sell it, and apply the proceeds to the franchisee's outstanding debt. However, before applying the proceeds to the debt, Ascentium will deduct any costs it incurs during the process. These costs can include expenses related to taking possession of the collateral, the costs of selling it, and any other expenses Ascentium incurs as a result of the default.
In addition to these costs, the franchisee is also responsible for paying Ascentium's costs and expenses, including reasonable attorneys' fees, incurred to enforce the financing agreement. This means that the franchisee could be responsible for covering Ascentium's legal costs if Ascentium has to take legal action to recover the debt or enforce the terms of the financing agreement.
This arrangement is fairly standard in franchise financing. It is important for prospective Chesters franchisees to carefully review the Ascentium Equipment Finance Agreement and understand the potential costs and liabilities associated with defaulting on the loan. Franchisees should also consider seeking legal advice to fully understand their rights and obligations under the financing agreement.