What factors determine the term length for Coffee News financing?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
t Applicable | Not Applicable |
ITEM 10
FINANCING
After one year under your agreement, we may finance additional purchases of franchise territories through Coffee News USA, Inc. at competitive rates and terms pursuant to a Promissory Note. If you want to buy more than one franchise, we may finance for up to three more franchises initially as long as you have good credit and net worth of at least $100,000.00. We also accept all major charge cards in payment. Interest will be at 5% APR (Annual Percentage Rate). The term will vary from two to five years based on the amount borrowed and the ability to pay based on the negotiations and a review of a personal financial statement.
There is no prepayment penalty. We will hold any such licensed rights to the licensed territories granted under the Coffee News License Agreement as security until you have paid your Promissory Note in full. There are no waivers of your legal rights and you are not barred from asserting a defense against us. We have no current practice or interest to sell, assign or discount to a third party all or part of the financing arrangement. If you do not pay on time, you hereby agree that Coffee News can call the loan and demand immediate payment of the full outstanding balance and obtain court costs and attorney's fees if a collection action is necessary. If Publisher / Debtor is a corporation, professional corporation, partnership, limited liability partnership, or a limited liability company, a Guarantee of Performance by the Principal stockholder(s), general partner(s), or member(s), as the case may be, must be executed.
Source: Item 10 — Financing (FDD pages 16–17)
What This Means (2025 FDD)
According to Coffee News's 2025 Franchise Disclosure Document, the term length for financing additional franchise territory purchases varies from two to five years. The specific term is determined by the amount borrowed and the franchisee's ability to repay the loan. This assessment is based on negotiations with Coffee News and a review of the franchisee's personal financial statement.
For franchisees with excellent credit and at least two years of verifiable advertising, sales, or entrepreneurial management experience, Coffee News may offer full funding for the purchase of four or more franchises. In this case, the loan term is up to 48 months, with weekly payments for principal and interest beginning in the fourth month of the agreement. Franchisees receiving this financing are required to attend Coffee News College and use Coffee News Printing, Inc. for printing services during the loan term.
These financing terms are subject to the franchisee executing a Promissory Note, with Coffee News holding the rights to the licensed territories as security until the note is paid in full. If a franchisee defaults on payments, Coffee News can demand immediate payment of the outstanding balance and pursue legal action to recover the debt, including court costs and attorney's fees. If the franchisee is a corporation, partnership, or LLC, a personal guarantee from the principal owners is required.