If an Anago franchisee makes a partial prepayment on their note, how is that payment applied?

According to Anago's 2025 Franchise Disclosure Document, a franchisee can prepay their note, either partially or in full, at any time without facing a penalty. However, any partial prepayment will be applied against the outstanding principal amount in the inverse order of maturity. This means the prepayment will be applied to the last payment due, then the second to last, and so on.

This method of applying prepayments does not automatically change the due date of any later payments. The franchisee will still be required to make payments according to the original schedule, unless Anago agrees in writing to postpone the due date of later payments. This provides Anago with flexibility in managing its cash flow and ensures consistent payment schedules unless explicitly altered.

For a prospective Anago franchisee, this means that making a partial prepayment will reduce the overall principal owed and the total interest paid over the life of the loan, but it will not change the monthly payment amount or schedule unless Anago provides written consent. It is important for franchisees to understand this policy and to discuss any desired changes to the payment schedule with Anago in writing to avoid any misunderstandings.