What is the intention regarding usury under the Caring Senior Service Guaranty?
Caring_Senior_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Usury Laws. Regardless of any provisions contained in this Note, the Payee shall never be deemed to have contracted for or be entitled to receive, collect, or apply as interest on the Note, any amount in excess of the Maximum Rate, and, in the event Payee ever receives, collects, or applies as interest any such excess, such amount which would be excessive interest shall be applied to the reduction of the unpaid principal balance of this Note, and, if the principal balance of this Note is paid in full, then any remaining excess shall be paid to Maker.
Source: Item 23 — RECEIPTS (FDD pages 53–204)
What This Means (2025 FDD)
According to the 2025 Caring Senior Service Franchise Disclosure Document, the franchise agreement addresses the issue of usury. The agreement states that regardless of any provision within the note, Caring Senior Service is never entitled to receive, collect, or apply any amount exceeding the maximum legal interest rate.
If Caring Senior Service ever receives an amount considered excessive interest, the agreement dictates that this excess will be applied to reduce the unpaid principal balance of the note. If the principal balance is fully paid, any remaining excess will be returned to the maker, ensuring compliance with usury laws.
This provision protects the franchisee (maker) from paying excessive interest rates and ensures that any overpayment is corrected by reducing the principal or refunding the excess amount. This clause is a standard protection against inadvertently violating usury laws, which vary by state.