What does the security interest granted by Chesters under the UCC secure?

According to Chesters's 2025 Franchise Disclosure Document, a franchisee grants Chesters a security interest under the Uniform Commercial Code (UCC) in the collateral, including all accessories, additions, replacements, proceeds, and products. This security interest is specifically granted to secure the franchisee's payment and performance of all obligations under the Equipment Financing Agreement (EFA). This means that Chesters has a legal claim on the specified assets to ensure the franchisee fulfills their financial and contractual duties.

This security interest allows Chesters to repossess and potentially sell the collateral if the franchisee fails to meet their obligations, such as making payments as agreed. The UCC governs such security interests, providing a legal framework for Chesters to protect its investment. The franchisee is responsible for keeping the collateral free from other liens and encumbrances, and must notify Chesters of any legal processes affecting the collateral.

For a prospective Chesters franchisee, this means understanding the full scope of the collateral and the obligations tied to the EFA. It is crucial to maintain payments and comply with all terms of the agreement to avoid losing the assets used as collateral. Additionally, the franchisee should be aware of the fees associated with the EFA, including potential costs for site inspections or lien searches, which may include a profit for Chesters.