What is the definition of 'Note' in the Boulder Designs Promissory Note?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
FOR VALUE RECEIVED, , whose address is (“Debtor”, whether one or more) jointly and severally promises to pay to the order of Boulder Designs Franchising, LLC, a Texas limited liability company, or its affiliates, successors, | and assigns (“Franchisor” or “PAYEE”) at its offices at 2324 N. Robinson Drive, Waco, Texas | 76706, or such other location as PAYEE may hereafter | designate, the principal sum of and/100 Dollars ($), together with interest on the unpaid | principal balance outstanding from time to time hereon at a rate equal to 8.5% per annum | or the Maximum Rate, whichever is less, under the terms and conditions of this promissory note and security agreement | (“Note”). This Note is due and payable in 42 | monthly installments of principal and interest. The first of payments shall be in an amount of $ commencing, 20, and on the | first day of each and every calendar month thereafter, and the 42nd | and final installment shall be due on , 20, on which date the entire unpaid principal balance and all accrued and unpaid | interest is due and payable in full. Each payment will first be applied to accrued and unpaid interest and | then to principal. Any payment not received by PAYEE within ten (10) days of its due date is subject to a | late fee of Fifty Dollars ($50). “Maximum Rate” means the maximum lawful rate of interest permitted by applicable usury laws | now or hereafter enacted which interest rate shall change when and as said laws change, to the extent | permitted by law, effective on the day such change in said laws becomes effective.
If Franchisor terminates the Franchise Agreement dated as of the date hereof between Franchisor | and (the “Franchise Agreement”) for any of the reasons stated in Section 16.2 | of the Franchise Agreement or, if Debtor fails to make a payment of principal, interest or any installment | thereof when due, and such failure continues for a period of ten (10) days, Franchisor may declare the entire | unpaid principal balance of, and all accrued but unpaid interest on, the indebtedness evidenced by this Note | immediately due and payable without notice or demand, foreclose all liens and security interests securing |
As a condition for Payee to agree to lend Debtor the funds contemplated herein this Note, Debtor grant to Payee, a security interest in its property, tangible and intangible, including but not limited to: all inventory, furniture, fixtures, equipment, and supplies now owned or subsequently acquired; and the proceeds, products, and accessions of and to any and all of the foregoing (the "Collateral").
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, the term "Note" refers to the promissory note and security agreement under which a Debtor promises to pay Boulder Designs Franchising, LLC, or its affiliates, successors, and assigns. This note outlines the terms and conditions of the loan, including the principal sum, interest rate, and repayment schedule. The interest rate is set at 8.5% per annum or the Maximum Rate, whichever is less. The note is payable in 42 monthly installments.
The promissory note specifies that payments are first applied to accrued interest and then to the principal balance. Late payments, defined as those received more than ten days after the due date, are subject to a $50 late fee. The "Maximum Rate" is defined as the highest lawful interest rate permitted by applicable usury laws, which may change over time as laws are updated.
Furthermore, the promissory note includes provisions for acceleration of the debt. If Boulder Designs terminates the Franchise Agreement for reasons stated in Section 16.2 of the Franchise Agreement, or if the Debtor fails to make a payment of principal or interest within ten days of the due date, Boulder Designs can declare the entire unpaid balance immediately due and payable. In such cases, Boulder Designs may also foreclose on any liens and security interests securing the note.
As a condition for Boulder Designs to agree to lend funds, the Debtor grants Payee a security interest in its property, tangible and intangible, including but not limited to: all inventory, furniture, fixtures, equipment, and supplies now owned or subsequently acquired; and the proceeds, products, and accessions of and to any and all of the foregoing (the "Collateral").