What are the implications of Chesters's lack of financing assistance (Item 10) on the franchisee's ability to secure a suitable site (Item 9)?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
| Obligation | Section in agreement | Disclosure document item | |
|---|---|---|---|
| a. | Site selection and acquisition/lease | Not Applicable | 11 and 12 |
| b. | Pre-opening purchases/leases | 5, 6, 8, 9, 10, and 16 of Agreement | 5, 7, and 8 |
As detailed in Item 10, we have a program with a third-party equipment lender, Ascentium Capital, a division of Regions Bank ("Ascentium"), to finance the purchase price for certain of the core equipment, signage, fixtures, and supplies you will need for your Restaurant. You will not pay us any monies or fees directly, but Ascentium will pay us the financed amount for the purchased core equipment, signage, fixtures, and supplies you will need for your Restaurant.
Lastly, from November 2013 to March 2015 we offered (through a separate franchise disclosure document) franchises for Area Director marketing businesses. An Area Director acts as our sales representative within a defined geographic area and solicits and identifies prospective CHESTER'S Restaurant franchisees; assists in locating and securing sites for, and then constructing and developing, Restaurants; and provides additional support before and after the Restaurants open.
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, Item 9 outlines the franchisee's obligations, including site selection and acquisition/lease, which are detailed in Sections 11 and 12 of the agreement. Item 10 discusses financing, but the provided excerpts do not contain information about Chesters offering direct financial assistance to franchisees for site selection or any other purpose, beyond a third-party equipment lender, Ascentium Capital, for core equipment, signage, fixtures, and supplies.
Without direct financing assistance from Chesters, franchisees must independently secure funding for site acquisition, leasehold improvements, and related costs. This could involve obtaining loans from banks, credit unions, or other financial institutions, or using personal savings. The franchisee's ability to secure a suitable site is therefore heavily dependent on their own financial resources and creditworthiness. This may limit the franchisee's options to locations they can afford, potentially impacting the restaurant's visibility and profitability.
While Chesters does not offer direct financing, they do provide assistance with site selection through Area Developers, who assist in locating and securing sites for Restaurants. However, the franchisee bears the ultimate responsibility for securing the site and funding its development. Prospective franchisees should inquire with Chesters about any preferred lenders or resources that may be available to assist with financing site acquisition and development, despite the lack of direct financial assistance from the franchisor.