What is the prepayment premium for a Beverly Anns Cookie loan in year three?
Beverly_Anns_Cookie Franchise · 2025 FDDAnswer from 2025 FDD Document
You will be permitted to prepay your Loan if they simultaneously pay a premium as follows: for each year or partial year remaining: (A) 3% in year one of the Loan, (B) 2% in year two of Loan, and (C) 1% in year three of the Loan; provided, that there will be no premium thereafter.
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
According to the 2025 Beverly Anns Cookie Franchise Disclosure Document, franchisees are permitted to prepay their loan, but must also pay a premium to do so. The prepayment premium decreases over the first three years of the loan.
Specifically, if a Beverly Anns Cookie franchisee chooses to prepay the loan in year three, they must pay a premium of 1% of the outstanding loan amount. This is lower than the premiums for prepayment in year one (3%) and year two (2%).
After year three, there is no prepayment premium required. This incentivizes franchisees to hold the loan for at least three years, but also provides flexibility to prepay earlier if they are willing to pay the associated premium.