Under the Chesters Equipment Finance Agreement (EFA), what does the 'Financed Amount' cover?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
h sleigh clamps, Snow Plow with 20 ft blade
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- Definitions: The words "you" and "your" refer to the DEBTOR, its successors and permitted assigns, as shown above. The words "we", "us" and "our" refer to the SECURED PARTY, its successors and assigns.
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- Funding: Representations & Warranties: We agree to lend to you, and you agree to borrow from us, the Financed Amount set forth above for the financing of the Collateral and any shipping, installation, training, taxes, fees and other soft costs that we have approved for financing under this EFA (together, the "Soft Costs"). You irrevocably instruct us to pay the Supplier on your behalf, which payment is the funding of our loan to you.
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, the Financed Amount under the Equipment Finance Agreement (EFA) covers the cost of the collateral, as well as any shipping, installation, training, taxes, fees, and other soft costs that Chesters has approved for financing. The EFA agreement provided shows a financed amount of $61,550.01. The payments include interest at 9.00% per annum on the unpaid Financed Amount. The collateral is described as a Flatbed Truck with sleigh clamps and a Snow Plow with a 20 ft blade.
The Financed Amount is based on the total estimated cost of the collateral and financed soft costs, adjusted for any non-reimbursed down payments made by the franchisee. If the final actual cost of the collateral and soft costs differs from the estimated cost, Chesters is authorized to adjust the Financed Amount to reflect the actual cost.
This means that a prospective Chesters franchisee should ensure that all anticipated costs, including not only the equipment itself but also associated expenses like shipping and training, are accurately reflected in the Estimated Cost provided to Chesters. Any discrepancies between the Estimated Cost and the Actual Cost could lead to adjustments in the Financed Amount and, consequently, the franchisee's payment obligations. It is also important to note that the franchisee may be required to execute a document reflecting these adjustments if requested by Chesters.