Is there a penalty for prepaying the Aunt Millies Bakeries loan?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
guaranty of the DSA Promissory Note.
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- Prepayment. You may prepay the loan with no penalty (DSA Promissory Note, §4).
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- Liability Upon Default.
Source: Item 10 — FINANCING (FDD pages 21–24)
What This Means (2025 FDD)
According to Aunt Millies Bakeries's 2025 Franchise Disclosure Document, franchisees have two potential financing options for the initial franchise fee: First Capital Acceptance Corp. (FCAC) and Distribution Services of America, Inc. (DSA). Both options allow for prepayment without penalty.
Specifically, if a franchisee obtains financing through First Capital to cover up to 90% of the franchise fee, they may prepay the loan without incurring any penalties. Similarly, if a franchisee opts for the supplemental financing from Distribution Services of America, Inc. (DSA) to cover the remaining 10% of the initial franchise fee, they also have the option to prepay the loan without any penalties.
This is a beneficial term for franchisees as it provides flexibility in managing their debt. If a franchisee's financial situation improves, they can reduce their debt obligations without incurring extra costs. This can lead to significant savings over the term of the loan, as it reduces the total interest paid.