Are payments made under any Note with Corcoran refundable?
Corcoran Franchise · 2025 FDDAnswer from 2025 FDD Document
- [6] For all Notes, the payments are non-refundable.
If you are in default under any Note (which includes without limitation defaults under your Franchise Agreements or other agreements with us and our Related Parties) or your Franchise Agreement is otherwise terminated for any reason while any Note is outstanding, all principal and accrued interest payments are accelerated, and you are obligated to pay immediately the entire amount due as well as any collection costs that may be incurred, including court costs and attorneys' fees.
Source: Item 10 — FINANCING (FDD pages 45–48)
What This Means (2025 FDD)
According to Corcoran's 2025 Franchise Disclosure Document, payments made under any Note are generally non-refundable. Specifically, this applies to both Conversion Promissory Notes (CPN) and Expansion Promissory Notes. However, the CPN offers an opportunity for forgiveness of a portion of the principal based on meeting certain annual Gross Revenues thresholds.
Corcoran may offer a Conversion Promissory Note (CPN) to assist with conversion or opening costs, including signage, materials, advertising, transitional expenses, acquisition opportunities, recruiting, or other business-related expenses. The CPN provides an annual opportunity to have a portion of the principal forgiven if certain annual Gross Revenues thresholds are met. If a franchisee complies with the Franchise Agreement and maintains certain levels of annual Gross Revenue, Corcoran will reduce the outstanding balance by a specified percentage each year until the CPN is effectively forgiven. The CPN has a maturity date of 9 years from January 1st of the first full calendar year after execution of the CPN. If the Franchise Agreement expires or terminates before the CPN maturity date, any outstanding unamortized principal balance is owed on the expiration or termination date.
However, if a franchisee fails to meet the required level of annual Gross Revenue or otherwise fails to meet the requirements for forgiveness under the CPN, Corcoran has the right to bill the agreed-upon amount of the annual principal for immediate payment. Furthermore, if a franchisee defaults under any Note or the Franchise Agreement is terminated for any reason while any Note is outstanding, all principal and accrued interest payments are accelerated, and the franchisee is obligated to pay immediately the entire amount due, as well as any collection costs, including court costs and attorneys' fees. This highlights the importance of carefully reviewing the terms and conditions of any financing offered by Corcoran and understanding the circumstances under which payments may become immediately due and non-refundable.