Under the Chesters EFA, what is the condition for the secured party to provide evidence of cost changes?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
You irrevocably instruct us to pay the Supplier on your behalf, which payment is the funding of our loan to you.
The Financed Amount is based upon the total estimated cost of the Collateral and financed Soft Costs (adjusted for any non-reimbursed down payments made by you) (the "Estimated Cost"), which Estimated Cost you and/or the Supplier have provided to us.
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's 2025 Franchise Disclosure Document, the Financed Amount in the Equipment Finance Agreement (EFA) is based on the total estimated cost of the collateral and financed soft costs. This estimated cost is provided by the franchisee or the supplier. If the final actual cost differs from the estimated cost, Chesters is authorized to adjust the Financed Amount accordingly.
Chesters will provide evidence of cost changes requiring such adjustments if the franchisee requests it. The franchisee also agrees to execute a document reflecting these adjustments if Chesters requests it.
This means that as a Chesters franchisee, you have the right to request documentation supporting any adjustments to the financed amount due to cost changes. It is important to carefully review these documents to ensure accuracy and transparency in the financing process.