Under the Chesters EFA, what happens to all accessories, additions, and replacements to the Collateral?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
You hereby grant to us a security interest under the Uniform Commercial Code ("UCC") in the Collateral and all accessories and additions thereto and replacements thereof and all proceeds and products of the foregoing.
Such security interest is granted to secure payment and performance by you of your obligations hereunder.
All amounts received from you under this EFA shall be applied towards your obligations to us as we determine.
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, under the Equipment Finance Agreement (EFA), Chesters is granted a security interest in the collateral, which includes all accessories and additions to it, as well as any replacements. This security interest ensures that the franchisee fulfills their obligations under the EFA. All payments made by the franchisee will be applied towards their obligations to Chesters, as determined by Chesters.
Chesters requires that the franchisee maintains the collateral in good working order and refrains from making any alterations, additions, or improvements that would diminish its economic value or functional utility. The franchisee is responsible for keeping records of the collateral's location and must report any changes in location to Chesters with prior written consent. Additionally, the franchisee must keep the collateral insured against loss, naming Chesters as the loss payee in the insurance coverage.
If the collateral is damaged, the franchisee is obligated to either repair it at their own expense or, if repair is not possible, pay Chesters the Casualty Value, which includes accrued unpaid amounts and the present value of remaining future payments. The franchisee bears the entire risk of loss, theft, damage, or destruction of the collateral, and such events do not relieve them of their payment obligations under the EFA. Chesters retains the right to inspect the collateral at any time during regular business hours and requires access to its location for this purpose.