How do prepayments of the Chem Dry Business Note affect the obligation to make installment payments?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
se, claim, set off, or other cause in favor of Borrower arising under the Franchise Agreement shall affect Borrower's obligations to pay this Business Note in accordance with its terms. CDI may assign, transfer, discount or pledge this Business Note without notice to Borrower. Borrower acknowledges that its obligations under this Business Note are independent of and are not conditioned or dependent upon any rights or obligations of the parties to the Franchise Agreement.
This Business Note may be prepaid in whole or in part, without premium, from time to time on the date that any installment comes due, with minimum partial payments of $100.00 or any multiple thereof.
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, prepaying the Business Note does not change the franchisee's obligation to make scheduled installment payments. Even if a franchisee makes prepayments on the Business Note, they are still required to continue making the originally scheduled payments of principal and interest until the Business Note is paid off completely.
The Business Note covers the balance of the Initial Fee, Initial License Fee, or other amounts owed to Chem Dry. The franchisee's obligations to pay this note are absolute, meaning they are not affected by any claims or disputes arising from the Franchise Agreement. Chem Dry has the right to assign, transfer, discount, or pledge the Business Note without informing the franchisee.
Chem Dry does allow the Business Note to be prepaid in part or in full on any installment due date, provided that partial payments are in minimum increments of $100. If the franchisee pays the full Initial License Fee within six months of the Business Note's date, Chem Dry will discount the total Initial License Fee by 10%.