What was the outstanding balance of Chesters' term loan with a 7.25% interest rate in 2023?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
and $145,397, respectively.
6. LONG-TERM DEBT
The Company has a credit agreement (the Agreement), as amended, with a financial institution and has the following outstanding debt:
| 2023 | 2022 | |
|---|---|---|
| Term loan – interest is payable at 7.25%. | $ 1,084,858 | $ 1,428,264 |
| The note matures in December 2028, collateralized | ||
| by certain business assets | ||
| Term loan – interest is payable at 4.5%. | 1,428,910 | 1,650,177 |
| Matures in October 2024, collateralized by | ||
| certain business assets | ||
| Tenant improvement loan – interest is payable at 8.25%. | 238,539 | - |
| Matures in October 2028, collateralized by | ||
| certain business assets |
Source: Item 21 — **FINANCIAL STATEMENTS (FDD page 48)
What This Means (2025 FDD)
According to Chesters' 2025 Franchise Disclosure Document, the outstanding balance of the term loan with a 7.25% interest rate was $1,084,858 in 2023. The note matures in December 2028 and is collateralized by certain business assets. This information is part of Chesters' financial statements.
Chesters also had another term loan with a 4.5% interest rate, which had an outstanding balance of $1,428,910 in 2023. This note matured in October 2024 and was also collateralized by certain business assets. Additionally, Chesters had a tenant improvement loan with an 8.25% interest rate, with an outstanding balance of $238,539 in 2023; this matures in October 2028 and is collateralized by certain business assets.
Prospective franchisees should note that these loans represent significant liabilities for Chesters. Understanding the terms, maturity dates, and collateral associated with each loan is crucial for assessing the financial stability of the franchisor. Furthermore, it is important to consider how these debts might impact Chesters' ability to support its franchisees and invest in the growth of the franchise system. Franchisees should also inquire about any loan covenants and whether Chesters has historically complied with them, as non-compliance can lead to financial instability.