Does Boulder Designs impose a prepayment penalty on its Promissory Note?

According to Boulder Designs's 2025 Franchise Disclosure Document, franchisees are able to prepay their Promissory Note without incurring a penalty. This is explicitly stated in Item 10, which covers the financing options that Boulder Designs may offer to qualified franchisees. Specifically, Boulder Designs may finance up to 50% of the equipment and supplies package cost if the equipment is new, or up to 75% if the equipment is used or refurbished.

The loan, evidenced by the Promissory Note, has a maximum term of 42 months and carries an annual interest rate of 8.5%. The repayment schedule consists of monthly installments of principal and accrued interest, with a final payment covering all outstanding amounts. The fact that Boulder Designs does not impose a prepayment penalty offers franchisees flexibility in managing their debt and potentially reducing their overall interest expenses if they are able to pay off the loan early.

This is a favorable term for franchisees, as many lenders impose prepayment penalties to protect their interest income. The absence of such a penalty in Boulder Designs's financing arrangement allows franchisees to accelerate their repayment schedule without incurring additional costs. This can be particularly beneficial if a franchisee's business performs well and generates excess cash flow, enabling them to reduce their debt burden more quickly.