In what form will the financing from Corcoran primarily be?
Corcoran Franchise · 2025 FDDAnswer from 2025 FDD Document
Neither we nor any Related Party is obligated to provide you any financing. We or a Related Party, however, have the right to offer you financing to assist with conversion costs or growth opportunities. This financing will be based on several factors, including without limitation your financial need, credit history, ability to repay, net worth, your business operations, including history of growing your business, and your stability as well as our need for the development of your market area. Depending on these factors, we may offer you financing in an amount equal to a percentage of the fees we expect to receive from your operations. We have the right to require you to furnish us with financial statements, tax returns and other documents. The terms of any financing, including the amount, the term of repayment, the amount of principal to be repaid, the amount of interest to be paid (where applicable), the security and other relevant terms are subject to negotiation between the parties as described below.
We or a Related Party primarily offers two types of financing. Unless noted below, the financing will be in the form of promissory notes ("Notes") as set forth in the table below:
Source: Item 10 — FINANCING (FDD pages 45–48)
What This Means (2025 FDD)
According to Corcoran's 2025 Franchise Disclosure Document, if Corcoran or a related party offers financing, it will primarily be in the form of promissory notes. These notes are subject to several factors, including the franchisee's financial need, credit history, ability to repay, net worth, business operations, history of growing the business, stability, and Corcoran's need for development in the franchisee's market area. The amount of financing may be a percentage of the fees Corcoran expects to receive from the franchisee's operations.
Corcoran primarily offers two types of financing: Conversion Promissory Notes (CPN) and Expansion Promissory Notes. CPNs assist with conversion or opening costs, including signage, materials, advertising, transitional expenses, acquisition opportunities, recruiting, or other business-related expenses. A CPN provides an annual opportunity to achieve forgiveness of a portion of the principal upon satisfaction of certain annual Gross Revenues thresholds. Expansion Promissory Notes are offered to existing franchisees for acquisition opportunities or other business-related expenses and are interest-bearing.
These notes must be guaranteed by the franchisee and personally guaranteed by all shareholders, partners, interest holders, and their respective spouses. Additionally, franchisees must sign a Security Agreement for all franchise assets, including after-acquired property, and Corcoran will file a UCC-1 financing statement for the business's assets. The terms of any financing, including the amount, term of repayment, principal, interest (if applicable), security, and other relevant terms, are subject to negotiation between the parties.