Is Corcoran obligated to provide financing to franchisees?
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, neither Corcoran nor any related party is obligated to provide financing to franchisees. However, Corcoran has the right to offer financing to assist with conversion costs or growth opportunities. This financing depends on factors such as 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 may require franchisees to furnish financial statements, tax returns, and other documents. The terms of any financing, including the amount, repayment term, principal repayment amount, interest amount (if applicable), security, and other relevant terms, are subject to negotiation between the parties. Corcoran primarily offers two types of financing, generally in the form of promissory notes.
Corcoran may offer a Conversion Promissory Note (CPN) to assist with conversion or opening costs, including costs for signage, materials, advertising and marketing programs, transitional expenses, acquisition opportunities, recruiting, or other business-related expenses, provided the funds are used for the Franchise. Franchisees must execute a CPN and an addendum to their agreement reflecting the terms of the CPN and a General Release as a condition for funding. The CPN provides for an annual opportunity to achieve forgiveness of a portion of the principal upon satisfaction of certain annual Gross Revenues thresholds. As an alternative to a CPN, Corcoran may offer financing opportunities to existing franchisees for acquisition opportunities or other business-related expenses under an interest-bearing Expansion Promissory Note. Expansion Notes are offered at Corcoran's discretion based on criteria including the length of time remaining in the Term, the franchisee's creditworthiness, and their business operations.