Can the Maker prepay the unpaid principal balance of the Note for Big O Tires?

According to Big O Tires' 2025 Franchise Disclosure Document, the Maker has the right to prepay the unpaid principal balance of the Note, in whole or in part, at any time without incurring any premium or penalty. However, this is conditional on the Maker also paying all accrued and unpaid interest on the unpaid principal balance up to the date of prepayment, calculated at the variable interest rate specified in the Note. This provision allows Big O Tires franchisees flexibility in managing their debt, as they can reduce their principal balance whenever they have excess funds available, potentially lowering their overall interest costs.

This prepayment option is a significant benefit for Big O Tires franchisees, as it allows them to optimize their financial strategy based on their business performance and cash flow. The absence of prepayment penalties is particularly advantageous, as it eliminates a common barrier to debt reduction. Franchisees should carefully consider the timing of prepayments, balancing the interest savings against other potential uses for their capital.

It's important to note that while prepaying the principal is permitted, all accrued interest must be paid up to the date of prepayment. This ensures that Big O Tires receives the interest it is entitled to, even if the principal is paid off early. Franchisees should factor this interest payment into their prepayment calculations to accurately assess the financial impact of prepaying the Note.

Overall, the ability to prepay the Note without penalty provides Big O Tires franchisees with a valuable financial tool. By strategically utilizing this option, franchisees can potentially reduce their debt burden and improve their overall profitability. Franchisees should consult with their financial advisors to determine the best approach for managing their debt and maximizing the benefits of this prepayment provision.