What is the Chesters franchisee irrevocably instructing the secured party to do?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
Licensee hereby authorizes Chester's International, LLC or a third party designated by Chester's International LLC to charge the designated credit card and/or Licensee hereby authorizes Chester's to initiate debit entries to the Account indicated above at the bank or other financial institution named above and to debit the same to such account. Licensee acknowledges that the origination of the ACH transactions to the Account must comply with the provisions of U.S. Law.
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, the franchisee authorizes Chesters International, LLC, or a third party designated by them, to charge the designated credit card. Additionally, the franchisee authorizes Chesters to initiate debit entries to the account indicated at the specified bank or financial institution and to debit that account.
This authorization means that Chesters can directly access the franchisee's funds for payments owed to them. The franchisee acknowledges that these ACH transactions must comply with U.S. Law.
This arrangement provides Chesters with a direct and reliable method for collecting payments, while the franchisee must ensure sufficient funds are available in the designated account to cover these debits. Franchisees should carefully consider the implications of granting such authorization and ensure they understand the terms and conditions associated with these transactions.