What does the stated interest rate exclude for the Chesters North Pole Coffee Express?

According to Chesters's 2025 Franchise Disclosure Document, the interest rate of 9.00% per annum for the North Pole Coffee Express equipment finance agreement excludes a pro-rated payment and all fees. Specifically, the agreement requires a pro-rated payment equal to 1/30th of a standard payment times the number of days from the loan's funding date to the first monthly due date. This pro-rated payment, along with any other fees, is not included in the stated 9.00% interest rate.

For a prospective Chesters franchisee, this means the actual cost of borrowing may be higher than initially perceived due to these additional charges. The franchisee should factor in the pro-rated payment and any other potential fees when calculating the total cost of the financing. Understanding these exclusions is crucial for accurate budgeting and financial planning.

Chesters retains the right to adjust the payment amount to maintain the stated interest rate if the financed amount changes. This adjustment ensures that the interest rate remains consistent even if the final cost of the collateral and soft costs differs from the estimated cost. Additionally, any amount not paid when due is subject to a late charge of the lower of 10% of such amount or the highest amount allowed by law, and any returned check or dishonored ACH debit incurs a $30 return fee.

Prospective franchisees should carefully review the terms of the equipment finance agreement and seek clarification on all applicable fees and pro-rated payments to fully understand the financial obligations associated with the loan. This will help in making informed decisions and avoiding unexpected costs during the loan term.