In the Coffee News promissory note, who is designated as the debtor?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
| IN WITNESS WHEREOF, the parties hereto have executed this Promissory Note contained herein on this day of, 20 | ||
|---|---|---|
| Holder: | Debtor: | |
| Coffee News USA, Inc | [Franchisee's name] By: Title: | |
| By: William A. Buckley | ||
| Title: President |
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
According to the 2025 Coffee News Franchise Disclosure Document, the franchisee is designated as the debtor in the promissory note. This means that the franchisee is the party responsible for repaying the debt outlined in the note. The franchisor, Coffee News USA, Inc., is identified as the holder, which means they are the ones to whom the debt is owed.
This designation is standard in franchising, as the franchisee typically borrows money to finance the startup costs, franchise fees, or other business-related expenses. The promissory note serves as a legal agreement outlining the terms of the loan, including the principal amount, interest rate, repayment schedule, and any collateral or security provided.
In the event that the Coffee News franchisee fails to meet the obligations outlined in the promissory note, such as failing to make timely payments or breaching other covenants, Coffee News USA, Inc. as the holder has certain rights and remedies. These may include the right to accelerate the debt, meaning the entire outstanding balance becomes immediately due and payable. The holder may also have the right to realize upon any security granted in the promissory note, such as the franchise itself, to recover the amounts owed. The guarantor(s) will also be responsible for the debt if the debtor is a corporation, professional corporation, partnership, limited liability partnership, or limited liability company.
Prospective Coffee News franchisees should carefully review the terms of the promissory note and understand their obligations as the debtor. It is advisable to seek legal counsel to fully understand the implications of the agreement and to ensure they can meet the financial obligations outlined in the note.