How does Corcoran apply payments to past due indebtedness?
Corcoran Franchise · 2025 FDDAnswer from 2025 FDD Document
ANNUAL INTEREST RATE: | 0%, EXCEPT AS DESCRIBED BELOW | | MATURITY DATE: | December 31, 20 |
- A. TERMS OF PAYMENT. FOR GOOD AND VALUABLE CONSIDERATION, the undersigned Maker and Co-Maker promise(s) to pay Holder (or its successors or assigns) the Principal set forth above on the Maturity Date and such Principal will be used for the Business (as defined in the Franchise Agreement). Payments are payable to Holder at 175 Park Avenue, Madison, New Jersey, or at such other place as Holder may designate in writing. The Principal will, except as set forth below, bear no interest.
- B. PRINCIPAL PAYMENTS/INTEREST. The Principal will be paid in one installment of $ , payable . If Maker or Co-Maker(s) fail to make any payment when due, including the payment due upon acceleration of this Note, the entire outstanding Principal will bear simple interest from its due date until paid in full at a rate equal to the lesser of eighteen percent (18%) per year or the highest rate allowed by law.
- C. APPLICATION OF MONIES DUE MAKER. Notwithstanding the installment payments, Maker agrees that Holder, at its sole option, without notice, may apply to the outstanding due and payable Principal (and any accrued and unpaid interest) payments due to Maker from Holder under the ERA Volume Incentive Plan described in any franchise agreement between Maker and Holder, as each may be amended (the "Franchise Agreement(s)"), if any ERA Volume Incentive Plan Award becomes due or payable to Maker. For purposes of this Section, Maker assigns, transfers and conveys to Holder all of Maker's rights, title and interest in and to the ERA Volume Incentive Plan Award. Amounts of ERA Volume Incentive Plan Awards applied against the Principal will correspondingly reduce amounts owed by Maker under this Note.
- D. PAYMENT. All payments will be made in lawful money of the United States of America without offset, recoupment, deduction or counterclaim of any kind. Payments, when made, will first be applied to accrued and unpaid interest, if any, and then to Principal. Maker and Co-Maker(s) may prepay this Note in whole or in part on any date without premium or penalty. No partial prepayment will extend or postpone the due date of any subsequent
installment payment or change the amount of the installment payment. Prepayments will be applied without notation on this Note.
- E. DEFAULT. Holder may determine that Maker and Co-Maker(s) are in default and may accelerate the unpaid Principal and all accrued interest to become immediately due and payable, without presentment for payment or any notice or demand, (A) if Maker, Co-Maker(s), endorser, surety or guarantor of this Note: (i) suspends business; (ii) becomes insolvent or offers settlement to any creditors; (iii) files a petition in bankruptcy, either voluntary or involuntary; (iv) institutes any proceeding under any bankruptcy or insolvency laws relating to the relief of debtors;
Source: Item 23 — RECEIPTS (FDD pages 75–276)
What This Means (2025 FDD)
According to Corcoran's 2025 Franchise Disclosure Document, when payments are made, they are first applied to any accrued and unpaid interest, and then to the principal amount owed. Additionally, Corcoran has the option, without needing to provide notice, to apply payments due to the franchisee from Corcoran, such as those from the ERA Volume Incentive Plan, to any outstanding principal and accrued interest. If Corcoran applies these ERA Volume Incentive Plan Awards against the principal, the amount the franchisee owes will be reduced accordingly.
If a franchisee fails to make a payment when it is due, including any payment due upon acceleration of the note, the entire outstanding principal will accrue simple interest. This interest rate will be the lesser of 18% per year or the highest rate allowed by law, calculated from the due date until the payment is made in full.
Corcoran also has the discretion to offset any amounts they owe to the franchisee in full or partial satisfaction of any amounts the franchisee owes to Corcoran or its related parties, particularly when the franchisee's payments are more than thirty days past due. This means that if Corcoran owes the franchisee money for any reason, they can use that money to cover the franchisee's outstanding debts to them.