What is the order in which payments are applied to the Boulder Designs Promissory Note?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
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).
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, each payment made on the promissory note will first be applied to any accrued and unpaid interest. The remaining portion of the payment will then be applied to the principal balance of the note. This means that in the early stages of the loan, a larger portion of the payment will go towards interest, while later in the loan term, more of the payment will reduce the principal.
This payment structure is typical for loans and promissory notes. Franchisees should be aware of this allocation, as it affects how quickly they reduce the principal balance and build equity. Understanding this can help in financial planning and managing cash flow.
Additionally, the FDD states that any payment not received by Boulder Designs within ten days of its due date will be subject to a late fee of $50. Franchisees must ensure timely payments to avoid incurring these additional charges.