What is the Chesters franchisee irrevocably instructing the secured party to do with the financed amount?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 23: **RECEIPTS]
You irrevocably instruct us to pay the Supplier on your behalf, which payment is the funding of our loan to you.
The Financed Amount is based upon the total estimated cost of the Collateral and financed Soft Costs (adjusted for any non-reimbursed down payments made by you) (the "Estimated Cost"), which Estimated Cost you and/or the Supplier have provided to us.
If the final actual cost of the Collateral and any financed Soft Costs that we pay the Supplier and any taxing authority (the "Actual Cost") is different than the Estimated Cost, you authorize us to adjust the Financed Amount to the Actual Cost.
If we request, you agree to execute a document reflecting such adjustments and we will provide you with evidence of our cost changes requiring such adjustments if you request.
You represent and warrant to us that all information conveyed to us in connection with this EFA and all related documents whether by you, a guarantor, the Supplier or any other person, is true, accurate, complete and not misleading.
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, the franchisee irrevocably instructs the secured party (which appears to be Chesters or a lending entity) to pay the supplier on the franchisee's behalf. This payment effectively funds the loan provided to the franchisee.
The financed amount is based on the total estimated cost of the collateral, which includes financed soft costs, adjusted for any down payments the franchisee has made. This "estimated cost" is provided by either the franchisee or the supplier to Chesters. If the final actual cost of the collateral and financed soft costs differs from the estimated cost, the franchisee authorizes Chesters to adjust the financed amount to reflect the actual cost.
Chesters may request the franchisee to execute a document reflecting these adjustments and will provide evidence of the cost changes if requested. The franchisee represents and warrants that all information provided in connection with the Equipment Finance Agreement (EFA) is true, accurate, complete, and not misleading. This arrangement ensures that the supplier is paid directly, and the loan amount accurately reflects the actual costs of the equipment and related expenses.