When does Chesters' term loan with a 4.5% interest rate mature?
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's 2025 Franchise Disclosure Document, the term loan with a 4.5% interest rate matured in October 2024. The loan was collateralized by certain business assets. In 2023, the balance of this loan was $1,428,910, while in 2022, it was $1,650,177.
This information is relevant to prospective franchisees as it provides insight into Chesters's debt obligations and how they are managed. Understanding the maturity dates and interest rates on existing loans can help franchisees assess the financial stability of the franchisor. Knowing that a loan matured in October 2024 allows a franchisee to inquire about the current status of that debt and whether it has been refinanced or paid off.
It's important to note that these figures are from the end of the 2023 and 2022 fiscal years. A prospective franchisee should request more current financial statements to understand Chesters's current financial position. This includes details on any new loans, changes in interest rates, and compliance with loan covenants. This due diligence will help in making an informed decision about investing in a Chesters franchise.