What is the prepayment penalty for a Beverly Anns Cookie franchise loan, and how is it calculated?
Beverly_Anns_Cookie Franchise · 2025 FDDAnswer from 2025 FDD Document
| Item Financed | One GRM/GRT and initial inventory pack | |
|---|---|---|
| Amount Financed | The full purchase price of GRM/GRT (currently $137,451 to $144,451 for GRM and $85,753 - $89,753 for GRT ) less $20,000 down payment, plus purchase price of initial inventory pack (currently $10,995) | |
| Down Payment | Balance of purchase price after Financing amount has been determined (not less than $20,000) | |
| Term | 36 to 66 months (includes up to 6 months of deferments) | |
| APR % | (A Credit) 8.99% (regardless of enrollment in deferments) or (B Credit) 10.49% to 10.99% (with deferments); up to 11.99% for first year only under interest-only plan (if allowed); rates may vary based on swap rates. | |
| Monthly Payment | 36 to 66 monthly installments (includes up to 6 months of deferments); may vary according to amount financed | |
| Prepayment Penalty | One percent (1%) for each year or partial year remaining on the loan |
Source: Item 10 — FINANCING (FDD pages 33–37)
What This Means (2025 FDD)
According to the 2025 Beverly Anns Cookie Franchise Disclosure Document, if a franchisee chooses to pay off their loan early, they will incur a prepayment penalty. This penalty is calculated as one percent (1%) for each year or partial year remaining on the loan term.
For example, if a franchisee has a loan with 3.5 years remaining and decides to pay it off, the prepayment penalty would be 4% of the outstanding loan balance (1% for each of the 3 full years, plus 1% for the partial year). This penalty applies to financing obtained through Auxilior Capital Partners.
This penalty could potentially add a significant cost to paying off the loan early, so franchisees should carefully consider the implications before making any prepayment decisions. It is important to factor this into financial planning and assess whether the benefits of paying off the loan early outweigh the cost of the prepayment penalty. Franchisees should consult with a financial advisor to evaluate their specific situation.