What was the interest rate for the term loan of Chesters payable in 2024?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
he Agreement), as amended, with a financial institution and has the following outstanding debt:
| 2024 | 2023 | |
|---|---|---|
| Term loan – interest is payable at 7.25%. | $ 718,235 | $ 1,084,858 |
| The note matures in December 2028, collateralized | ||
| by certain business assets | ||
| Term loan – interest is payable at prime rate minus 0.25%. |
Source: Item 21 — **FINANCIAL STATEMENTS (FDD page 48)
What This Means (2025 FDD)
According to Chesters' 2025 Franchise Disclosure Document, the company had two term loans outstanding in 2024. One term loan had an interest rate of 7.25%. The second term loan's interest was payable at the prime rate minus 0.25%.
It is important to note that these loans are collateralized by certain business assets, which means that Chesters has pledged assets as security for the loans. If Chesters defaults on the loans, the lender has the right to seize these assets and sell them to recover the outstanding debt.
Prospective franchisees should consult with a financial advisor to fully understand the implications of Chesters' debt obligations and how they might affect the financial stability of the company and, by extension, the franchisee's investment.