Under the Chesters EFA, what rights does the assignee have if Chesters assigns the EFA?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
We may sell, transfer, assign or encumber this EFA, in whole or in part, without notice to you or your consent.
You agree that if we sell, transfer, assign or encumber this EFA, the assignee will have the rights and benefits that we assign to the assignee and will not have to perform any of our obligations.
You agree that the rights of the assignee will not be subject to any claims, defenses or set-offs that you may have against us.
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters' 2025 Franchise Disclosure Document, Chesters has the right to sell, transfer, assign, or encumber the EFA (Equipment Financing Agreement), in whole or in part, without providing notice to the franchisee or obtaining their consent.
If Chesters assigns the EFA, the assignee will have the rights and benefits that Chesters assigns to them. Importantly, the assignee does not have to perform any of Chesters' obligations under the agreement. This means that the assignee essentially steps into Chesters' shoes with respect to the benefits of the agreement, but without the burden of Chesters' responsibilities.
Furthermore, the rights of the assignee will not be subject to any claims, defenses, or set-offs that the franchisee may have against Chesters. This provision protects the assignee from disputes between the franchisee and Chesters, ensuring that the assignee's rights remain intact regardless of any issues that may arise between the original parties. This could impact a Chesters franchisee if they have unresolved disputes with Chesters, as those disputes cannot be used to offset obligations to the new assignee.