What action must a Beverly Anns Cookie borrower take before making a Deferment payment?
Beverly_Anns_Cookie Franchise · 2025 FDDAnswer from 2025 FDD Document
ment Location Address: Transaction Terms/ Payment Schedule: Principal Interest Rate: Term (in months): Payment Amount: Payable Monthly with Amount: First Payment Due:
Deferments:
If Borrower is contractually current on all obligations hereunder, Lender will offer the ability to Defer payments based upon and subject to the following:
- A Deferment payment is a $100 payment made at the time of a regularly scheduled payment for the normal Payment Amount.
- Prior to making a Deferent payment, Borrower must contact Lender by phone to confirm the availability of each proposed Deferment.
- In most instances a Deferment payment will be insufficient to amortize interest and negative amortization will occur. This means that interest will build on the account and remain due.
- Upon an event of Default as referenced below, no Deferment shall be allowed.
This Loan is eligible for Deferments based on the following schedule:
- o For the 12 months after the Date of Note you may Defer up to four (4) single monthly payments.
- o For the 13 24 months after the Date of Note you may Defer up to two (2) single monthly payments.
- o No more than four (4) Deferments may be used consecutively.
- o Deferments are not cumulative,
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
According to Beverly Anns Cookie's 2025 Franchise Disclosure Document, a borrower must contact the lender by phone to confirm the availability of each proposed deferment before making a deferment payment. This requirement ensures that the borrower is eligible for the deferment and that the lender is aware of the borrower's intention to defer payment.
A deferment payment is defined as a $100 payment made at the time of a regularly scheduled payment for the normal payment amount. It's important to note that in most instances, a deferment payment will be insufficient to cover the interest, potentially leading to negative amortization, where interest builds up on the account and remains due.
The loan agreement specifies eligibility for deferments within certain timeframes: up to four single monthly payments may be deferred during the first 12 months after the date of the note, and up to two single monthly payments may be deferred during months 13-24. No more than four deferments can be used consecutively, and deferments are not cumulative or bankable, meaning they can only be used within the specified periods. Deferments are not available after the 24th month from the date of the note, whether exercised or not. Furthermore, no deferment is allowed upon an event of default.