Under the Chesters EFA, what is the effect of the parties freely negotiating the terms?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree this EFA may be signed electronically pursuant to the Electronic Signatures in Global and National Commerce Act and other applicable law.
Only the copy of this EFA marked as the "sole original" or similar language by Secured Party or its designee is the chattel paper original of this EFA.
This EFA shall become effective upon Debtor's signature below, provided, however, that our obligation to perform our obligations under this EFA shall be subject to our satisfactory receipt of all conditions specified by us, including a complete and properly executed documentation package, as determined by us. By signing below, Debtor hereby irrevocably authorizes Secured Party to pay the Supplier on behalf of Debtor. The person executing this EFA is authorized to do so, making this EFA valid and binding on Debtor.
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
Based on the 2025 FDD, the Equipment Finance Agreement (EFA) between Chesters and the franchisee does not appear to be freely negotiated. The document states that the EFA becomes effective upon the franchisee's signature, but Chesters' obligation to perform is subject to their satisfactory receipt of all conditions specified by them. This includes a complete and properly executed documentation package, as determined by Chesters. This indicates that Chesters sets the conditions, and the franchisee must meet them for the agreement to proceed.
Additionally, the EFA contains several clauses that heavily favor Chesters. For example, the franchisee authorizes Chesters to complete any blank spaces in the document with dates deemed appropriate by them. The franchisee also agrees to receive notices and communications from Chesters via email, voice, and text messages, potentially incurring access fees from their provider. Furthermore, the franchisee waives the secondary evidence rule, agreeing that an electronically duplicated copy of the EFA can be used in place of the original.
These terms suggest that the EFA is presented on a "take it or leave it" basis, with limited opportunity for negotiation. While the document does not explicitly prohibit negotiation, the numerous clauses protecting Chesters' interests and the franchisee's obligation to meet their conditions imply that the terms are largely non-negotiable. A prospective franchisee should carefully review the EFA and seek legal counsel to fully understand their rights and obligations before signing.