What can Chesters franchisees finance through the Ascentium Capital Equipment Financing Program?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 10 — FINANCING (FDD pages 23–24)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, the Ascentium Capital Equipment Financing Program allows franchisees to finance the purchase of certain core equipment, signage, fixtures, and supplies needed for their restaurant. This arrangement provides a financing option through a third-party lender, Ascentium, to help franchisees acquire essential items for their Chesters location.
The interest rates on these loans are fixed at the time the loan is funded, and they depend on factors such as the loan term, loan amount, Ascentium's cost of funds, the franchisee's credit history, and their operating history. As of the issuance date of the FDD, the stated interest rate is approximately 4.99% per annum. However, Ascentium earns an actual annual interest rate of about 8.50% because they deduct 5% to 10% of the total purchase price for the equipment, signage, fixtures, and supplies. This deduction is part of an agreement with Chesters to reduce the franchisee's annual interest rate.
While Chesters does not receive fees from Ascentium for referring franchisees, the total purchase price for the core equipment, signage, fixtures, and supplies will be approximately 5% to 10% higher if financed through Ascentium compared to paying cash or using a different third-party financing option. This difference should be considered when evaluating financing options. The loan is secured by the property acquired with the loan proceeds, and Ascentium may require personal guarantees from the franchisee's owners. Franchisees are also responsible for a $195 documentation fee, and potentially UCC search fees or site inspection fees, depending on the loan amount and collateral requirements.