Under the Chesters EFA, what is the Actual Cost that is paid?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
If the final actual cost of the Collateral and any financed Soft Costs that we pay the Supplier and any taxing authority (the "Actual Cost") is different than the Estimated Cost, you authorize us to adjust the Financed Amount to the Actual Cost.
If we request, you agree to execute a document reflecting such adjustments and we will provide you with evidence of our cost changes requiring such adjustments if you request.
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters' 2025 Franchise Disclosure Document, the Actual Cost under the Equipment Financing Agreement (EFA) refers to the final, real cost of the collateral and any financed soft costs that Chesters pays to the supplier and any taxing authority. This Actual Cost may differ from the initial Estimated Cost.
Chesters, under the EFA, is authorized to adjust the financed amount to reflect the Actual Cost. This means that if the final cost of the equipment or related soft costs is different from what was initially estimated, the amount being financed will be updated to match the true cost. Chesters may request the franchisee to execute a document acknowledging these adjustments and will provide evidence of the cost changes if requested.
This adjustment mechanism ensures that the franchisee is only financing the actual cost of the collateral and soft costs. It protects both the franchisee and Chesters from discrepancies between estimated and final costs, providing transparency in the financing process. Franchisees should carefully review the Estimated Cost and understand that the Financed Amount may change based on the Actual Cost.