Does the Chesters FDD include documents related to financing through Ascentium Capital?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
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We have arranged for third-party Ascentium (defined in Item 5) to offer term loans to our franchisees to finance your purchase of certain core equipment, signage, fixtures, and supplies you will need for your Restaurant. A copy of the Ascentium Equipment Finance Agreement (1 page and 2 page versions) and the related prepayment addendums, currently used by Ascentium are attached to this disclosure document as Exhibit G. Key terms of the current Ascentium Equipment Finance Agreement are detailed below.
Franchisees will pay fixed monthly payments of principal and interest accruing on the loan. Interest rates will be fixed at the time the loan is funded based on factors including length of term, loan amount, Ascentium's cost of funds, your credit history and operating history, and other relevant risk factors. These factors will also be considered in setting your monthly loan payment amount. As of the issuance date of this disclosure document, the rate of interest you will pay on each loan from Ascentium is approximately 4.99% per annum, but 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 us as part of our agreement with Ascentium to reduce your annual interest rate from 8.50% to 4.99%, as adjusted from time to time. The interest rate available to franchisees on Ascentium loans may vary over time. We do not receive any fees from Ascentium for referring our franchisees to Ascentium for financing, but as noted above and in Item 10 the total purchase price you pay to us for the core equipment, signage, fixtures, and supplies will be approximately 5% to 10% higher than if you pay us cash or finance through a different third party.
Loan terms are typically 60 months but terms from 3 to 6 years may be available (depending upon the circumstances). You may prepay the loan in full but you must pay all unpaid Payments discounted to their present value as of the prepayment date using a per annum discount rate equal to the lower of (i) the interest rate set forth in the Agreement or (ii) 3%. You may not make partial prepayments.
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
Source: Item 22 — **CONTRACTS (FDD page 48)
What This Means (2025 FDD)
Yes, according to Chesters' 2025 Franchise Disclosure Document, the FDD includes documents related to financing through Ascentium Capital. Item 10 discusses the Ascentium Capital Equipment Financing Program, and Exhibit G consists of Ascentium Capital Financing Program Documents.
Chesters has arranged for Ascentium Capital to offer term loans to franchisees for purchasing core equipment, signage, fixtures, and supplies. The Ascentium Equipment Finance Agreement, along with related prepayment addendums, is included as Exhibit G to the FDD. The interest rates are fixed at the time the loan is funded, based on factors such as the loan term, amount, credit history, and operating history.
As of the issuance date of the 2025 FDD, the interest rate on Ascentium loans is approximately 4.99% per annum; however, Ascentium earns an annual interest rate of approximately 8.50% because they deduct 5% to 10% of the total purchase price from the amount paid to Chesters. This arrangement reduces the franchisee's interest rate from 8.50% to 4.99%. While Chesters does not receive fees from Ascentium for referring franchisees, the total purchase price for core equipment, signage, fixtures, and supplies is 5% to 10% higher than if the franchisee pays cash or finances through another third party. Loan terms are typically 60 months, but can range from 3 to 6 years, and a $195 documentation fee is required for each loan.
To be eligible for an Ascentium loan, franchisees must meet Ascentium's credit requirements, and the loan is secured by the acquired property. Ascentium may also require personal guarantees from the franchisee's owners. Defaulting on the loan can lead to accelerated payments, repossession of collateral, and liability for Ascentium's costs and expenses, including attorney's fees. A late payment incurs a charge of 10% of the payment amount, and a returned check or ACH charge is $30. The franchisee must also maintain insurance on the collateral. Disputes concerning the loan must be venued in Alabama, and the franchisee waives the right to a jury trial and to assert improper venue.