What are the implications of Chesters not offering financing (Item 10) on the estimated initial investment costs detailed in Item 7?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
Except as provided in Item 10 below, neither we nor our affiliates offer financing directly or indirectly for any part of the initial investment.
The availability and terms of third-party financing depend on the availability of financing generally, your creditworthiness and collateral, and lending policies of financial institutions.
The estimate does not include any finance charge, interest, or debt-service obligation.
| Type of expenditure* | Amount | Method of payment | When due | To whom payment is to be made | |---|---|---|---|---| | Training Fee | $3,500 | Lump sum | At signing of Agreement | Us | | Equipment, | $12,000 - $55,000 | As arranged | As incurred5 | Approved | | Furniture, Signage, | | and Fixtures4 | | | | Suppliers, | | | | | | including Us6 | | Initial Inventory7 | $2,000 - $9,000 | As arranged | As incurred | Approved Suppliers, | 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.
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.
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, Chesters does not directly or indirectly offer financing for the initial investment, with a limited exception. Item 7 states that the availability and terms of third-party financing depend on factors like the franchisee's creditworthiness, collateral, and the lending policies of financial institutions. The estimated initial investment costs, detailed in Item 7, do not include any finance charges, interest, or debt-service obligations. This means a prospective franchisee must secure funding through their own means, and the cost of that financing is not reflected in the initial investment estimates.
For a prospective Chesters franchisee, this means they need to have sufficient capital or access to loans to cover the initial investment, which ranges from $12,000 to $55,000 for equipment, furniture, signage, and fixtures, and $2,000 to $9,000 for the initial inventory. The franchisee should also consider additional funds needed for the first 3 months of operation. Since these costs do not include financing fees, the franchisee must budget for interest and other borrowing costs. The franchisee will also need to pay a $3,500 training fee.
Chesters does have a program with Ascentium Capital to finance the purchase price for certain core equipment, signage, fixtures, and supplies. However, the total purchase price you pay to Chesters for the core equipment, signage, fixtures, and supplies will be approximately 5% to 10% higher than if you pay cash or finance through a different third party. This arrangement could potentially increase the overall initial investment compared to securing financing independently, but it may offer a more accessible financing option for some franchisees. Franchisees should carefully evaluate the terms and conditions of the Ascentium Capital program and compare it to other financing options to determine the most cost-effective solution for their situation.