What is the 'Principal Amount Financed' field used for in this Coffee News loan agreement?
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 the 2025 Coffee News Franchise Disclosure Document, the 'Principal Amount Financed' field in the loan agreement specifies the initial sum of money that the franchisee (referred to as the "Debtor") borrows. This amount is the base upon which interest and other finance charges are calculated. The loan agreement outlines the terms of repayment, including the duration of the loan, the start date, and the monthly payment amount. For Coffee News, the monthly payment is set at $25.00 per week for each franchised unit.
The loan agreement also details the total number of payments, the total principal amount to be paid over the loan's duration, the finance charges to be paid, and the total cost of the loan, which includes both the principal and the finance charges. The Debtor is obligated to make these payments on a specific day of each calendar month until all principal, interest, and any other charges are paid off, with a defined maturity date for the loan.
This financial structure is typical in franchise agreements where the franchisor or a lending partner provides financing to help franchisees cover startup costs or franchise fees. Understanding the 'Principal Amount Financed' is crucial for a prospective Coffee News franchisee, as it directly impacts their repayment obligations and overall financial planning. It's important to note that the loan is secured by the licensed rights to the territory granted to the franchisee in the Coffee News Franchise Agreement.