What is the franchisee required to do if the secured party requests a document reflecting adjustments to the financed amount for the Chesters North Pole Coffee Express?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
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 (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.
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, if the final actual cost of the collateral and any financed soft costs is different than the estimated cost, Chesters is authorized to adjust the financed amount to the actual cost. If the secured party requests, the franchisee must agree to execute a document reflecting such adjustments. Chesters will provide evidence of cost changes requiring such adjustments if the franchisee requests it.
This clause protects the lender (Ascentium Capital) if the initial cost estimates for equipment and soft costs are inaccurate. It ensures the loan amount reflects the true expenses. For a prospective Chesters franchisee, this means they need to be prepared to sign documents adjusting the loan amount if the final costs differ from the initial estimates.
It is important for the franchisee to carefully review the evidence of cost changes provided by Chesters to ensure the adjustments are accurate and justified. This also highlights the importance of getting accurate cost estimates upfront to minimize the potential for adjustments later in the process. Franchisees should maintain open communication with both Chesters and the supplier to track costs and address any discrepancies promptly.