What is the Beverly Anns Cookie borrower's obligation regarding paying the loan?
Beverly_Anns_Cookie Franchise · 2025 FDDAnswer from 2025 FDD Document
gned this Loan and prior to our acceptance of this Loan, we may at our sole discretion, cancel this loan. ONCE WE ACCEPT THIS LOAN, YOU MAY NOT CANCEL IT DURING THE FULL LOAN TERM. You
- agree to be bound by all the terms of this Loan from the date you execute this Loan ("Effective Date") until you have paid the Loan in full.
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- DELIVERY, ACCEPTANCE OF EQUIPMENT AND COMMENCEMENT OF THE LOAN. Borrower hereby certifies to Lender that the Equipment has been duly ordered, an invoice for the Equipment has been issued and the Equipment will be delivered to the location where it will be used. Borrower acknowledges that signature of this document confirms that Equipment will be properly installed and in good working order and constitutes an unconditional acceptance of the Equipment upon delivery and hereby authorizes the commencement of the Loan ("Commencement Date").
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- PAYMENT. You agree to pay us the Loan Payments when each payment is due. If we designate the Loan Payment to begin later than the Commencement Date, you will pay interim interest on the Principal Amount from the commencement Date until the first Loan Payment due date. Interim interest shall be equal to the pro rata portion of the daily equivalent of the Loan interest rate. Payment is due whether or not you receive an invoice from us. Restrictive endorsements on checks you send to us will not reduce your obligations to us. For any payment which is not received by its due date, you agree to pay a late charge equal to the greater of 5% of the amount due or $25.00 (not to exceed the maximum amount permitted by law).
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- UNCONDITIONAL OBLIGATION. YOU AGREE THAT YOU ARE UNCONDITIONALLY OBLIGATED TO PAY ALL PAYMENTS AND ANY OTHER AMOUNTS DUE UNDER THIS LOAN FOR THE FULL LOAN TERM EVEN IF THE EQUIPMENT IS DAMAGED OR DESTROYED, IF IT IS DEFECTIVE OR YOU HAVE TEMPORARY OR PERMANENT LOSS OF ITS USE. YOU ARE NOT ENTITLED TO REDUCE OR SET-OFF AGAINST PAYMENT OR OTHER AMOUNTS DUE UNDER THIS LOAN FOR ANY REASON WHATSOEVER.
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- DISCLAIMER OF WARRANTIES. THE EQUIPMENT IS BEING USED BY YOU IN AS-IS CONDITION. NO INDIVIDUAL IS AUTHORIZED TO CHANGE ANY PROVISION OF THIS LOAN. YOU AGREE THAT WE HAVE NOT MANUFACTURED THE EQUIPMENT OR LICENSED THE EQUIPMENT AND THAT YOU HAVE SELECTED THE EQUIPMENT BASED UPON YOUR OWN JUDGMENT. YOU HAVE NOT RELIED ON ANY STATEMENTS WE OR OUR EMPLOYEES HAVE MADE. WE HAVE NOT MADE AND DO NOT MAKE ANY EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES WHATSOEVER, INCLUDING WITHOUT LIMITATION, THE EQUIPMENT MERCHANTIBILITY, FITNESS FOR A PARTICULAR PURPOSE, SUITABILITY, DESIGN, CONDITION, DURABILITY, OPERATION, QUALITY OF MATERIALS OR WORKMANSHIP, OR COMPLIANCE WITH SPECIFICATIONS OR APPLICABLE LAW. You are aware of the name of the Equipment manufacturer. You agree to contact the manufacturer for a description of your warranty rights, if any. You agree to settle any dispute you may have regarding performance of the Equipment directly with the manufacturer of the Equipment.
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- SECURITY INTEREST. To secure all of your obligations to us under this Loan you hereby grant us a security interest in (a) the Equipment to the extent of your interests in the Equipment, (b) anything attached or added to the Equipment at any time, (c) any money or property from the sale of the Equipment, and (d) any money from an insurance claim if the Equipment is lost or damaged. You agree that the security interest will not be affected if this loan is changed in any way. As required, you agree, at your own expense, to register the Equipment to you at your address set forth above and to title the Equipment to you, showing us as secured party or lien holder. You hereby irrevocably authorize us at any time and from time to time to file in any Uniform Commercial Code jurisdiction any financing statements prepared and filed on your behalf by us (or our agent) with the same force and effect as if you had signed such financing statements. If we request, you agree to sign financing statements in order for us to publicly record our security interest. This Loan or a copy of this Loan shall be sufficient as a financing statement and may be filed as such.
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
According to the 2025 Beverly Anns Cookie Franchise Disclosure Document, the borrower is unconditionally obligated to pay all payments and any other amounts due under the loan for the full loan term, even if the equipment is damaged or destroyed, defective, or if there is a temporary or permanent loss of its use. The borrower is not entitled to reduce or set-off against payment or other amounts due under the loan for any reason whatsoever.
Beverly Anns Cookie requires the borrower to make loan payments when each payment is due, regardless of whether an invoice is received. If the loan payment start date is after the commencement date, the borrower will pay interim interest on the principal amount from the commencement date until the first loan payment due date. This interim interest will be equal to the pro rata portion of the daily equivalent of the loan interest rate.
For any payment not received by its due date, the borrower agrees to pay a late charge equal to the greater of 5% of the amount due or $25.00, not to exceed the maximum amount permitted by law. The borrower may be permitted to prepay the loan if they simultaneously pay a premium. The premium is calculated as follows for each year or partial year remaining: 3% in year one of the loan, 2% in year two of the loan, and 1% in year three of the loan; there will be no premium charged thereafter.
These terms highlight the importance of understanding the loan agreement fully. A prospective Beverly Anns Cookie franchisee should carefully consider these obligations and the potential financial risks associated with the loan, including the lack of set-off rights and the potential for late fees and prepayment penalties.