Is there a prepayment penalty for the Chem Dry Business Note?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
the highest rate allowed by applicable law, whichever is less.
All Business Note payments are due on or before the tenth day of each month. The Business Note must be issued and signed by the franchisee and its owners, officers, shareholders, or members as personal guarantors, if an entity. There is no prepayment penalty. The Business Note includes a waiver of defenses (or similar provisions).
If you do not make Business Note payments when due, CDI may accelerate the Note and demand immediate payment of the full outstanding principal amount plus accrued interest. CDI may also terminate the Franchise Agreement under Section 15 of the Franchise Agreement. A charge of $50.00 will be assessed for any installments returned unpaid. In the event of collection proceedings, CDI reserves the right to pursue costs associated with the collections, including court costs and attorney fees in accordance w
Source: Item 10 — FINANCING (FDD pages 35–37)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, there is no prepayment penalty for the Business Note. This means a franchisee can pay off the loan early without incurring any extra charges.
Chem Dry may finance up to 40% of the Initial License Fee for franchisees who meet their credit standards. The interest rate on the Business Note ranges from 8% to 15%, depending on the franchisee's creditworthiness and Chem Dry's underwriting standards. The franchisee is required to make a non-refundable down payment when signing the Franchise Agreement and Business Note, with the remaining balance paid in monthly installments.
It is important to note that if a franchisee fails to make timely payments on the Business Note, Chem Dry has the right to accelerate the note, demanding immediate payment of the full outstanding principal plus accrued interest. Additionally, Chem Dry may terminate the Franchise Agreement if payments are not made when due. A $50 fee is charged for any returned unpaid installments. In the event of collection proceedings, Chem Dry reserves the right to pursue associated costs, including court costs and attorney fees.