What secures the loan provided to Chesters franchisees by Ascentium?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
ts.
To be eligible for a loan from Ascentium, you must meet the credit requirements of Ascentium. The loan will be secured by the property you are obtaining with the loan proceeds. Ascentium may require as a condition to making any loan that your owners personally guaranty your obligations to Ascentium. You are required to pay Ascentium a $195 documentation fee for each loan. Depending on loan amount and collateral requirements, you also may be required to pay a UCC search fee and/or site inspection fee.
You will be in default under your loan if you fail to make payments in a timely manner; if you or any guarantor become insolvent, file a petition in bankruptcy, make an assignment for the benefit of creditors or admit the inability to pay debts as they become due; if you or any guarantor terminate existence or take any action to cease or wind up your business affairs; you otherwise breach or default under any agreement with Ascentium; or you merge, consolidate with, or sell substantially all of your assets or a majority of your ownership interests to any third party without Ascentium's prior written consent.
If you default, Ascentium may, at its election, accelerate and require that you pay all accrued and unpaid amounts outstanding, and all of the remaining payments due under the financing agreement (discounted to present value at the higher of 3% per annum or the lowest rate allowed by law). Ascentium can also take possession of the collateral, sell it and apply the proceeds against what you owe Ascentium after deducting any costs it incurs. You must also pay Ascentium's costs and expenses, including reasonable attorneys' fees, to enforce the financing agreement. If you make a payment late you must pay Ascentium a late charge of 10% of the payment amount (not to exceed the highest rate allowed by applicable law). Ascentium may charge you a return check or return ACH charge of $30 for any payment which is returned by your bank for any reason (not to exceed the maximum amount permitted by law).
You must insure the collateral, at your cost, against all loss during the term of the loan. If you fail to satisfy your insurance obligations, Ascentium may obtain insurance on its collateral and you must pay Ascentium all charges for obtaining the insurance including its administrative fees.
You waive your right to reduction or set-off against any payments due on the loan and any issues relating to the collateral must be resolved directly with the supplier. Any disputes concerning the loan must be venued in Alabama. You waive your right to a jury trial and to assert improper venue.
Ascentium can assign its rights and interests in the loan and the loan collateral. If it assigns the loan or its interest in the collateral, the rights of the assignee will not be subject to any claims, defenses or set-offs you had against Ascentium.
Your breach of your Ascentium Equipment Finance Agreement may also be a breach of your Agreement with us.
ITEM 11 FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING
Except as listed below, we are not required to provide you with any assistance.
Source: Item 10 — FINANCING (FDD pages 23–24)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, the loan provided by Ascentium Capital to Chesters franchisees is secured by the property acquired with the loan proceeds. This means that if a franchisee fails to meet the loan obligations, Ascentium has the right to seize the equipment, signage, fixtures, and supplies purchased with the loan to recover the outstanding debt. Additionally, Ascentium may require the franchisee's owners to personally guarantee the loan, adding another layer of security for the lender.
Several conditions and fees are associated with the Ascentium loan. Franchisees are responsible for a $195 documentation fee for each loan. Depending on the loan amount and collateral requirements, they may also be required to pay a UCC search fee and/or a site inspection fee. Furthermore, franchisees must maintain insurance on the collateral throughout the loan term to protect against loss. Failure to meet insurance obligations allows Ascentium to obtain insurance on the collateral and charge the franchisee for all associated costs and administrative fees.
Default conditions for the loan include failure to make timely payments, insolvency, bankruptcy filings, assignment for the benefit of creditors, or admitting inability to pay debts. Default can also occur if the franchisee or any guarantor terminates existence, ceases business operations, breaches any agreement with Ascentium, or transfers ownership without Ascentium's written consent. In the event of default, Ascentium can accelerate the loan, demand immediate payment of all outstanding amounts, take possession of the collateral, sell it, and apply the proceeds to the debt, after deducting any costs incurred.
It is important for prospective Chesters franchisees to carefully review the Ascentium Equipment Finance Agreement and related prepayment addendums (Exhibit G) to fully understand the terms, conditions, and potential risks associated with the loan. Franchisees should also be aware that disputes concerning the loan must be venued in Alabama, and they waive their right to a jury trial and to assert improper venue. Additionally, a breach of the Ascentium Equipment Finance Agreement may also constitute a breach of the franchise agreement with Chesters.