How is interest calculated on the Secured Promissory Note for Bath Tune Up?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
event whatsoever shall the aggregate of all amounts deemed interest under this Note and charged or ted hereunder exceed the highest rate permissible under any law which a court of competent action shall, in a final determination, deem applicable hereto. If any provisions of this Note are in evention of any such law, such provisions shall be deemed amended to conform thereto. Interest ader shall be calculated daily and shall be computed on the actual number of days elapsed over a year days.
Source: Item 23 — RECEIPTS (FDD pages 52–222)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, the interest calculation for the Secured Promissory Note is detailed in Exhibit J. The interest is calculated daily, based on the actual number of days elapsed over a 365-day year. The document specifies that the aggregate of all amounts considered as interest will not exceed the highest rate permissible under applicable law as determined by a court of competent jurisdiction. If any provision contradicts such law, it will be amended to conform accordingly.
Prospective Bath Tune Up franchisees should note that the interest calculation method ensures compliance with usury laws, protecting them from excessive interest charges. The daily calculation provides a transparent and consistent approach to accruing interest on the principal amount. This also allows franchisees to prepay the note without penalty, provided they also pay all accrued interest at the time of prepayment.
It is important for potential franchisees to understand these terms, as they directly impact the cost of borrowing and the overall financial obligations under the franchise agreement. Franchisees should consult with a financial advisor to fully assess the implications of the interest calculation method and its effect on their investment.