What is the prepayment penalty for a Beverly Anns Cookie loan if I pay it off early?
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 Beverly Anns Cookie's 2025 Franchise Disclosure Document, if you obtain financing through Eagle Financial Services, Inc. or Auxilior Capital Partners and decide to pay off the loan early, a prepayment penalty will be applied. The prepayment penalty is calculated as one percent (1%) for each year or partial year remaining on the loan.
For a prospective Beverly Anns Cookie franchisee, this means that paying off the loan early could incur a significant cost, especially if there are several years remaining on the loan term. For example, if a franchisee has three and a half years left on their loan and decides to pay it off, the prepayment penalty would be 4.0% of the outstanding loan balance (1% for each of the three full years, plus 1% for the partial year).
This penalty can impact a franchisee's decision on when and whether to pay off the loan early. It's important to consider this penalty when evaluating the overall cost of financing and when making financial decisions about the franchise. Franchisees should carefully review the terms of the loan agreement to fully understand the implications of the prepayment penalty and how it is calculated in their specific case.
It is also important to note that the FDD mentions financing options through Osgood Bank, but does not specify the prepayment penalty, if any, associated with their loans. A prospective franchisee should inquire about the prepayment penalty for Osgood Bank financing to make an informed decision.