Is there a penalty for prepaying a Coffee News Promissory Note?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
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, there is no prepayment penalty associated with the Coffee News Promissory Note. This means that franchisees can pay off their loan early without incurring any additional fees.
Coffee News holds the licensed rights to the licensed territories as security until the Promissory Note is paid in full. If a franchisee fails to make timely payments, Coffee News has the right to demand immediate payment of the full outstanding balance, including court costs and attorney's fees if a collection action becomes necessary.
For franchisees structured as corporations, professional corporations, partnerships, limited liability partnerships, or limited liability companies, a Guarantee of Performance by the principal stockholder(s), general partner(s), or member(s) is required. This ensures that the individuals behind the business are also personally responsible for the debt. This arrangement protects Coffee News in case of default, while the absence of a prepayment penalty offers franchisees flexibility in managing their finances.