Does the Coffee News loan agreement allow for early repayment without penalty?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
nd correct. | (the ed the foregoing Schedule B as | | My Commission expires: | Notary Public |
SCHEDULE C PROMISSORY NOTE (An alternative option to SDHCEDULE B)
| $ | , 20 | |
|---|---|---|
| 04401 | [trade in section pay to the order of Coffee News US [1] (the "Holder"), the sum of | address of the Franchisee] doing business name of his business] (the "Debtor") SA, Inc. at 120 Linden St., Bangor, Maine f Dollars sipal") and such other finance charges, in |
| 1. | The payments shall be made as follows | : |
| Principal Amount Financed: Duration of Loan: Start Date of Loan: | $ (months) | |
| Monthly Payment ($25.00/week for each franchised unit): | $ | |
| Total Number of Payments: Principal Amount to be paid: Finance Charges to be paid: Total Cost of the loan: | $ $ $ | |
| month descri contin | ning on, 20 [ n until he/she have paid all of the princ ibed above that he/she may owe under t | on the day of each cal |
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
According to Coffee News's 2025 Franchise Disclosure Document, the loan agreement includes a section that addresses repayment terms. Specifically, it states that the debtor will make monthly payments on a specified day of each calendar month until all principal, interest, and other charges are paid. The document explicitly notes that these payments can be made without penalty. This suggests that Coffee News franchisees have the flexibility to pay off their loan obligations early without incurring any additional fees or charges.
This provision is beneficial for franchisees who experience early financial success or wish to reduce their debt burden more quickly. It allows them to manage their finances more efficiently and potentially save on interest costs over the life of the loan. The absence of prepayment penalties is a favorable term compared to some loan agreements, which may impose fees for early repayment.
However, the document also outlines conditions under which the entire debt becomes immediately due. These include failure to pay interest or principal, breach of any agreement related to the promissory note, bankruptcy proceedings, or termination of the Coffee News Franchise Agreement. In such cases, the holder of the note is entitled to all charges as if the note were prepaid in full, indicating that while early repayment is generally penalty-free, defaulting on the loan triggers immediate and full payment obligations.
Prospective Coffee News franchisees should carefully review the entire loan agreement to fully understand all terms and conditions related to repayment, default, and any potential implications for their franchise operations.