What components are included in the calculation of the Principal Amount for a Benjamin Franklin Plumbing franchise?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
Debtor and Secured Party entered into a Promissory Note ("Note") on the same date as this Security Agreement ("Agreement") under which Secured Party agreed to permit Debtor to pay a portion of the Franchise Fee on a payment plan;
Debtor is jointly and severally indebted to Secured Party in the principal amount of $ as evidenced by the Note (the "Indebtedness"); and
As a material inducement for Secured Party's accepting the Note, Debtor has agreed to secure Debtor's performance under the provisions and conditions of the Note, the Franchise Agreement, and any other debts Debtor owes to Secured Party by granting to Secured Party a security interest in the collateral described in this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 87–88)
What This Means (2025 FDD)
According to the 2025 Benjamin Franklin Plumbing Franchise Disclosure Document, the principal amount is related to a Promissory Note. Specifically, the Debtor is indebted to the Secured Party (Benjamin Franklin Franchising SPE LLC) in the principal amount as evidenced by the Note. This Note is connected to a payment plan for a portion of the Franchise Fee.
In simpler terms, if a Benjamin Franklin Plumbing franchisee finances a portion of their franchise fee through a promissory note with the franchisor, the initial amount they owe (before interest and payments) is considered the principal amount. This amount is a debt the franchisee owes to Benjamin Franklin Franchising SPE LLC, and it's documented in the Promissory Note.
As a material inducement for Secured Party's accepting the Note, Debtor has agreed to secure Debtor's performance under the provisions and conditions of the Note, the Franchise Agreement, and any other debts Debtor owes to Secured Party by granting to Secured Party a security interest in the collateral described in this Agreement.