How are payments 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). "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
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, payments made on a promissory note are first applied to any accrued and unpaid interest, and then to the principal balance. The promissory note is payable in 42 monthly installments. If a payment is not received within ten days of its due date, a late fee of $50 will be charged.
The interest rate on the unpaid principal balance is 8.5% per annum or the Maximum Rate, whichever is less. The "Maximum Rate" refers to the highest lawful interest rate permitted by applicable usury laws, which may change over time.
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, interest, or any installment when due and this failure continues for ten days, Boulder Designs can declare the entire unpaid principal balance and all accrued but unpaid interest immediately due and payable without notice or demand and foreclose all liens and security interests securing.