What is the prepayment premium for a Beverly Anns Cookie loan in year two?
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 Beverly Anns Cookie's 2025 Franchise Disclosure Document, franchisees are permitted to prepay their loan with a premium. The prepayment premium is structured as follows: 3% in year one, 2% in year two, and 1% in year three. After the third year, there is no prepayment premium.
For a prospective Beverly Anns Cookie franchisee, this means that if they decide to pay off their loan in the second year, they will incur a prepayment premium of 2% of the outstanding loan amount. This is in addition to the outstanding principal and any accrued interest.
This prepayment structure incentivizes franchisees to hold the loan for a longer period, as the premium decreases over time. Franchisees should carefully consider their financial situation and potential savings from prepayment against the cost of the premium before deciding to prepay their loan. It's also important to note that this prepayment option is a privilege, not an obligation, and is subject to the terms and conditions outlined in the loan agreement.