What is the Chesters franchisee's obligation regarding Ascentium's costs and expenses, including reasonable attorneys' fees, in the event of default?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
If you default, Ascentium may, at its election, accelerate and require that you pay all accrued and unpaid amounts outstanding, and all of the remaining payments due under the financing agreement (discounted to present value at the higher of 3% per annum or the lowest rate allowed by law). Ascentium can also take possession of the collateral, sell it and apply the proceeds against what you owe Ascentium after deducting any costs it incurs. You must also pay Ascentium's costs and expenses, including reasonable attorneys' fees, to enforce the financing agreement.
Source: Item 10 — FINANCING (FDD pages 23–24)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, if a franchisee defaults on their financing agreement with Ascentium, they are responsible for covering Ascentium's costs and expenses, including reasonable attorneys' fees, incurred to enforce the financing agreement. This means that in addition to any outstanding amounts owed under the loan, the franchisee will also have to pay for Ascentium's legal and other costs associated with pursuing the default.
This obligation can significantly increase the financial burden on a franchisee who is already struggling with default. Legal fees and other enforcement costs can be substantial, potentially adding thousands of dollars to the amount owed. It is important for prospective Chesters franchisees to carefully consider the terms of the Ascentium Equipment Finance Agreement and understand the potential financial consequences of default.
Franchisees should be aware that this type of clause is relatively standard in financing agreements. Lenders typically include such provisions to protect their interests and ensure they can recover the costs associated with enforcing the agreement in case of default. Before signing any financing agreement, a prospective Chesters franchisee should consult with a financial advisor and an attorney to fully understand their obligations and potential risks.