What credit requirements must Chesters franchisees meet to be eligible for a loan from Ascentium?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
ts.
To be eligible for a loan from Ascentium, you must meet the credit requirements of Ascentium. The loan will be secured by the property you are obtaining with the loan proceeds. Ascentium may require as a condition to making any loan that your owners personally guaranty your obligations to Ascentium. You are required to pay Ascentium a $195 documentation fee for each loan. Depending on loan amount and collateral requirements, you also may be required to pay a UCC search fee and/or site inspection fee.
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.
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 law).
You must insure the collateral, at your cost, against all loss during the term of the loan. If you fail to satisfy your insurance obligations, Ascentium may obtain insurance on its collateral and you must pay Ascentium all charges for obtaining the insurance including its administrative fees.
You waive your right to reduction or set-off against any payments due on the loan and any issues relating to the collateral must be resolved directly with the supplier. Any disputes concerning the loan must be venued in Alabama. You waive your right to a jury trial and to assert improper venue.
Source: Item 10 — FINANCING (FDD pages 23–24)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, to be eligible for a loan from Ascentium Capital, a third-party financing option Chesters has arranged, franchisees must meet Ascentium's credit requirements. The interest rates are fixed at the time the loan is funded and are based on factors including the length of the term, the loan amount, Ascentium's cost of funds, the franchisee's credit history and operating history, and other relevant risk factors. These factors are also considered when setting the monthly loan payment amount.
The loan obtained from Ascentium will be secured by the property acquired with the loan proceeds. Ascentium may also require the owners of the franchise to personally guarantee the obligations to Ascentium as a condition of granting the loan. Franchisees are responsible for paying a $195 documentation fee for each loan. Depending on the loan amount and collateral requirements, franchisees may also be required to pay a UCC search fee and/or a site inspection fee.
As of the issuance date of the 2025 disclosure document, the interest rate franchisees will pay on each loan from Ascentium is approximately 4.99% per annum. However, Ascentium will actually earn an annual interest rate of approximately 8.50% on each loan because Ascentium will deduct an amount equal to approximately 5% to 10% of the total purchase price for the core equipment, signage, fixtures, and supplies from the amount paid to Chesters as part of their agreement with Ascentium to reduce the annual interest rate from 8.50% to 4.99%, as adjusted from time to time. Chesters franchisees should note that the interest rate available on Ascentium loans may vary over time.
If a franchisee defaults on the loan, Ascentium may demand immediate payment of all outstanding amounts, including 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 to the outstanding debt, after deducting any costs incurred. The franchisee is also responsible for Ascentium's costs and expenses, including reasonable attorneys' fees, to enforce the financing agreement. Late payments incur a charge of 10% of the payment amount, not exceeding the highest rate allowed by applicable law, and returned payments are subject to a $30 fee.