How is interest accrued for the Beverly Anns Cookie loan note?
Beverly_Anns_Cookie Franchise · 2025 FDDAnswer from 2025 FDD Document
perty, real, personal or intangible, that secures my performance of the obligations of this Loan.
- F. Percent. Rates and rate change limitations are expressed as annualized percentages.
- G. Dollar Amounts. All dollar amounts will be payable in lawful money of the United States of America.
- 2. PROMISE TO PAY. For value received, I promise to pay you or your order, at your address, or at such other location as you may designate, the principal sum of $120,200.00 (Principal) plus interest from January 31, 2022 on the unpaid Principal balance until this Note matures or this obligation is accelerated.
- 3. INTEREST. Interest will accrue on the unpaid Principal balance of this Note at the rate of 6.000 percent (Interest Rate).
- A. Post-Maturity Interest. After maturity or acceleration, interest will accrue on the unpaid Principal balance of this Note at 18.000 percent until paid in full.
- B. Maximum Interest Amount. Any amount assessed or collected as interest under the terms of this Note will be limited to the maximum lawful amount of interest allowed by applicable law. Amounts collected in excess of the maximum lawful amount will be applied first to the unpaid Principal balance. Any remainder will be refunded to me.
- C. Accrual. Interest accrues using an Actual/365 days counting method.
- 4. ADDITIONAL CHARGES. As addition
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
According to the 2025 Beverly Anns Cookie Franchise Disclosure Document, interest accrues on the unpaid principal balance of the loan note at a rate of 6.000 percent. This interest rate is annualized. The interest accrues using an Actual/365 days counting method. This means the daily interest calculation is based on the actual number of days in a year, rather than assuming a standardized 360-day year, which is a common practice.
After the loan reaches maturity or is accelerated (meaning the full amount becomes due immediately), the interest rate increases significantly to 18.000 percent. However, the amount of interest assessed or collected will be limited to the maximum lawful amount allowed by applicable law. Any amount collected that exceeds this legal maximum will first be applied to reduce the unpaid principal balance. If there is any remaining overpayment after the principal is paid off, it will be refunded to the borrower.
For a prospective Beverly Anns Cookie franchisee, this means understanding the terms of the loan is crucial. Paying close attention to the initial interest rate of 6.000 percent and the method of accrual (Actual/365) will allow for accurate budgeting and financial planning. It is also important to be aware of the much higher post-maturity interest rate of 18.000 percent, which could apply if the loan is not paid on time or if the lender accelerates the loan due to default. Franchisees should also be aware of additional fees, such as the $200 loan fee payable from the loan proceeds.
It is important for potential franchisees to consult with a financial advisor to fully understand the implications of these loan terms and how they might affect their overall financial situation. Understanding the maximum lawful interest rate in their jurisdiction is also crucial to ensure compliance and avoid potential disputes.