What conditions must an Aunt Millies Bakeries franchisee meet to qualify for financing through First Capital?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
You must meet First Capital's credit requirements.
If you enter into a financing agreement with First Capital, you will authorize us to deduct, from any sums owed to you as a result of the weekly settlement of your account, an amount sufficient to meet your monthly loan payment. We will also deduct an amount sufficient to pay, on a monthly basis, your insurance premium (if purchased through the program made available by Allstate Insurance or by Christine & Mullen Insurance Group, a third party vendor). We will forward these monthly payments directly to First Capital and insurance company in a timely manner. See Purchase of Receivables included as Exhibit B(4) to this Franchise Disclosure Document.
Source: Item 10 — FINANCING (FDD pages 21–24)
What This Means (2025 FDD)
According to Aunt Millies Bakeries's 2025 Franchise Disclosure Document, to qualify for financing through First Capital Acceptance Corp., a prospective franchisee must meet First Capital's credit requirements. First Capital offers financing for up to 90% of the initial franchise fee, subject to qualification and applicability.
If a franchisee enters into a financing agreement with First Capital, they authorize Aunt Millie's Bakeries to deduct the monthly loan payment from the weekly settlement of their account. Aunt Millie's Bakeries will also deduct the monthly insurance premium if the franchisee purchases insurance through Allstate Insurance or Christine & Mullen Insurance Group. These payments will then be forwarded to First Capital and the insurance company.
The loan from First Capital has a 10-year repayment period and an annual percentage rate of 10.5%. The loan is secured by the franchisee's rights under the franchise, accounts receivable, contract rights, chattel paper, equipment, inventory, goods, property, general intangibles, accessions, replacements, additions, and proceeds related to the franchise. Aunt Millie's Bakeries does not require a personal guaranty for the First Capital Note, and the franchisee can prepay the loan without penalty.
Upon default, First Capital can declare the entire principal balance immediately due and payable, with a 12% annual interest rate. The franchisee is responsible for all of First Capital's collection costs, including attorney's fees and court costs. Additionally, the franchisee waives certain legal rights upon default, such as the right to presentment, demand for payment, protest, notice of dishonor, notice of protest, and notice of default of the note.