What is the Chesters franchisee's responsibility regarding the execution of a document reflecting adjustments to the financed amount?
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 differs from the initial estimated cost, Chesters is authorized to adjust the financed amount to reflect the actual cost. If Chesters requests it, the franchisee must agree to execute a document that reflects these adjustments. Furthermore, Chesters will provide evidence of the cost changes that necessitate these adjustments if the franchisee requests it.
This clause ensures that the financing accurately reflects the final costs of the assets being financed. It protects Chesters by allowing them to adjust the loan amount to match the actual expenses incurred. It also places a responsibility on the franchisee to cooperate with these adjustments by signing the necessary documentation.
For a prospective Chesters franchisee, this means being prepared to potentially adjust the loan amount based on the final costs of collateral and soft costs. It is important to maintain accurate records and communicate effectively with Chesters and any suppliers to ensure that the estimated costs are as accurate as possible. Franchisees should also request and review the evidence of cost changes provided by Chesters to understand the basis for any adjustments to the financed amount. This clause is fairly standard in franchise agreements where financing is involved, as it protects the lender from discrepancies between estimated and actual costs.