For a Clear Pest Pros promissory note, how are monthly installments applied?
Clear_Pest_Pros Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Monthly installments shall be applied first upon interest and the balance upon principal. This Promissory Note may be prepaid in full at any time without restriction or penalty.
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- Should any monthly installment not be paid when due, then the Holder shall elect to either (a) require that the whole sum of the remaining principal and interest shall become due immediately and payable upon notice to the Undersigned or (b) charge a late fee of 5% or $50, per week, whichever sum is greater. All unpaid amounts owing on this Promissory Note shall immediately become due and payable at the option of Holder without notice or demand upon the occurrence of any of the following events of default: (i) the default of any provision of the Promissory Note; or (ii) the death, dissolution, insolvency (however expressed or indicated) or the filing of a petition in bankruptcy, reorganization or for the adjustment of debts for, by or against the Undersigned; (iii) the sale of substantially all of the Undersigned's stock or assets; (iv) the Undersigned's failure to permit Holder to collect amounts via EFT.
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- The validity, construction, interpretation and enforceability of the terms of this Promissory Note shall be determined and governed by the laws of the State of Michigan.
Source: Item 22 — CONTRACTS (FDD pages 67–68)
What This Means (2025 FDD)
According to the 2025 Clear Pest Pros Franchise Disclosure Document, monthly installment payments are first applied to cover the interest accrued, with the remaining balance then being applied to reduce the principal amount of the note. The promissory note can be prepaid without any restrictions or penalties.
If a monthly installment is not paid when due, the holder of the note has the option to either demand immediate payment of the entire remaining principal and interest or to impose a late fee. This late fee is calculated as 5% or $50 per week, depending on which amount is greater.
Additionally, all unpaid amounts become immediately due and payable at the holder's discretion if there is a default on any provision of the promissory note, the death or insolvency of the undersigned, the sale of substantially all of the undersigned's stock or assets, or the undersigned's failure to permit the holder to collect amounts via EFT. These terms are governed by Michigan law.