Under the Chesters EFA, can I sell or transfer the collateral?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
Assignment; Inspection: YOU HAVE NO RIGHT TO SELL, TRANSFER, ASSIGN, LEASE OR ENCUMBER THE COLLATERAL OR THIS EFA.
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.
We and our agents and representatives shall have the right at any time during regular business hours to inspect the Collateral and for that purpose to have access to the location of the Collateral.
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, under the EFA (Equipment Finance Agreement), franchisees are explicitly prohibited from selling, transferring, assigning, leasing, or encumbering the collateral. However, Chesters retains the right to sell, transfer, assign, or encumber the EFA, either partially or entirely, without requiring notice or consent from the franchisee.
Furthermore, if Chesters sells, transfers, assigns, or encumbers the EFA, the assignee assumes all associated rights and benefits without having to fulfill Chesters's original obligations. The rights of the assignee are not subject to any claims, defenses, or set-offs that the franchisee may have against Chesters. This means that a franchisee cannot use any grievances against Chesters to impede the assignee's rights.
Chesters, along with its agents and representatives, retains the right to inspect the collateral at any time during regular business hours and has the right to access the location of the collateral for this purpose. This condition underscores Chesters's control over the collateral and the franchisee's limited rights regarding its disposal or transfer.