Does Chesters reserve the right to offer financing or assist franchisees in obtaining financing in the future?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
We do not guarantee your note, lease or obligation. Except as noted below, we do not currently place financing with anyone and do not receive any payment for the placement of financing. We do not have any past or present practice or intention to sell, assign or discount to any third party, in whole or in part, any financing arrangements. We reserve the right to offer financing or assist franchisees in obtaining financing in the future.
Ascentium Capital Equipment Financing Program.
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. A copy of the Ascentium Equipment Finance Agreement (1 page and 2 page versions) and the related prepayment addendums, currently used by Ascentium are attached to this disclosure document as Exhibit G. Key terms of the current Ascentium Equipment Finance Agreement are detailed below.
Franchisees will pay fixed monthly payments of principal and interest accruing on the loan. Interest rates will be fixed at the time the loan is funded based on factors including length of term, loan amount, Ascentium's cost of funds, your credit history and operating history, and other relevant risk factors. These factors will also be considered in setting your monthly loan payment amount. As of the issuance date of this disclosure document, the rate of interest you will pay on each loan from Ascentium is approximately 4.99% per annum, but Ascentium will actually earn an annual interest rate of approximately 8.50% on each loan because Ascentium will deduct an amount equal to approximately 5% to 10% of the total purchase price for the core equipment, signage, fixtures, and supplies from the amount paid to us as part of our agreement with Ascentium to reduce your annual interest rate from 8.50% to 4.99%, as adjusted from time to time. 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.
Source: Item 10 — FINANCING (FDD pages 23–24)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, Chesters retains the right to offer financing or assist franchisees in securing financing in the future, although they do not currently do so, with the exception of the Ascentium Capital Equipment Financing Program.
Chesters has arranged a third-party financing option through Ascentium Capital for franchisees to finance the purchase of core equipment, signage, fixtures, and supplies. Franchisees will make fixed monthly payments covering principal and interest, with interest rates determined at the time the loan is funded. These rates depend on factors such as the loan term, loan amount, the franchisee's credit and operating history, and Ascentium's cost of funds. As of the issuance date of the FDD, the interest rate is approximately 4.99% per annum; however, Ascentium earns an annual interest rate of approximately 8.50% because Ascentium deducts 5% to 10% of the total purchase price.
It is important to note that Chesters does not receive fees from Ascentium for these referrals. However, the total purchase price paid to Chesters for the core equipment, signage, fixtures, and supplies will be approximately 5% to 10% higher than if the franchisee pays cash or finances through another third party. This arrangement could be beneficial for franchisees who need financing but may result in higher overall costs compared to alternative financing options.