Does the Best Brains Promissory Note allow for changes to the interest rate?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
Each person liable on this Note in any capacity, whether as maker, endorser, surety, guarantor or otherwise, and any holder (collectively hereafter "Obligor"), waives the benefit of the homestead exemption and of all other exemptions available to him and also waives presentment, demand, protest, notice of dishonor and all other notices of every kind and nature to which he would otherwise be entitled under the applicable law. Each Obligor agrees that Holder may take any one or more of the following actions, on one or more occasions, whether before or after the maturity of this Note, without any notice to such Obligor, without any further consent to such actions, and without releasing or discharging such Obligor from liability on the Note: (a) any extension or extensions of the time of payment of any principal, interest or other amount due and payable under this Note; (b) any renewal of this Note, in whole or in part; (c) any full or partial release or discharge from liability under this Note of any other Obligor; (d) any waiver of any default under this Note or other agreement between the Lender and any Obligor relating to the indebtedness evidenced by this Note; or (e) any agreement with the Maker changing the rate of interest or any other term or condition of this Note.
Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, the Promissory Note does allow for changes to the interest rate. The FDD states that each person liable on the note, including the maker, endorser, surety, or guarantor, agrees that Best Brains may make changes to the note without notice or consent, and without releasing the obligor from liability. These actions include agreements with the maker to change the rate of interest or any other term or condition of the note.
This clause in the Best Brains promissory note has significant implications for a franchisee. Best Brains retains the right to alter the interest rate of the note, which could increase the cost of borrowing for the franchisee. The franchisee does not have to be notified or give consent for these changes, which means that Best Brains has considerable control over the financial terms of the note after it has been issued.
It is important for a prospective Best Brains franchisee to fully understand the terms of the promissory note, including the provisions that allow Best Brains to change the interest rate or other conditions. Franchisees should seek legal and financial advice to assess the potential impact of these terms on their business and personal finances. Understanding these terms is crucial for making an informed decision about investing in a Best Brains franchise.