How is the interest rate computed and accrued on the Tempe Loan for the Bw Premier Collection?
Bw_Premier_Collection Franchise · 2025 FDDAnswer from 2025 FDD Document
The interest rate on the Tempe Loan is a fixed annual rate of 3.50% and is computed and accrued on an ACT/360 basis. The Tempe Loan is secured by, among other things, the Deed of Trust and is guaranteed by the Company.
Source: Item 23 — Receipts (FDD pages 54–203)
What This Means (2025 FDD)
According to Bw Premier Collection's 2025 Franchise Disclosure Document, the interest rate on the Tempe Loan is a fixed annual rate of 3.50%. The interest is computed and accrued on an ACT/360 basis. This means that the interest calculation uses the actual number of days in a month (ACT) and assumes a 360-day year.
For a prospective Bw Premier Collection franchisee, understanding the interest calculation method is crucial for financial planning. The ACT/360 method can result in slightly higher interest charges compared to a simple interest calculation, as it effectively increases the daily interest rate.
The Tempe Loan is secured by a Deed of Trust and guaranteed by the Company, indicating the importance and security associated with this loan. Franchisees should be aware of these loan terms and how they might affect their overall financial obligations and cash flow.