How can the open account credit from Cornwell Quality Tools be used?
Cornwell_Quality_Tools Franchise · 2025 FDDAnswer from 2025 FDD Document
ther policies and procedures.
- H. Following each of the first, three 52-week periods after payments have commenced on the Note, if you have complied with the requirements of the Agreement and the Note during that period, Cornwell will then issue an open account credit to you, to be used only for the purchase of additional inventory, in the amount of $20,000.
- I. If during the first 104 weeks after the loan payments commence you have maintained a purchase average of at least $8,400 per week (not including the Starter Inventory), Cornwell will then issue a further open account credit to you of $10,000 to be used only for the purchase of additional inventory.
- J. If during the first 156 weeks after the loan payments commence you have maintained a purchase average of at least $8,400 per week (not including the Starter Inventory or additional inventory purchased with the credit described in subparagraph I above), Cornwell will then issue a further open account credit to you of $15,000 to be used only for the purchase of additional inventory.
- K. If at any time within 36 months of the Start Date you have introduced at least 3 new dealers to Cornwell, the inventory portion of the Note (not the Reserve portion) will be deemed satisfied in full without the requirement of further payments. Any partial-year payments to the date of Note satisfaction will be credited to your open account.
- L. If you both fail to satisfy the average purchase requirement and have not introduced a new dealer during the preceding 52 weeks, your status as a Franchise Developer may be terminated by Cornwell. The Note may then be declared in default and accelerated, including accrued time-price charges and late charges.
- C. Special Representative Program.
Source: Item 10 — FINANCING (FDD pages 33–43)
What This Means (2025 FDD)
According to Cornwell Quality Tools' 2025 Franchise Disclosure Document, open account credit can be used specifically for purchasing additional inventory. Several scenarios allow a franchisee to obtain open account credit.
First, after each of the first three 52-week periods after payments have commenced on the Note, if the franchisee has complied with the requirements of the Agreement and the Note during that period, Cornwell Quality Tools will issue an open account credit. The credit will be $20,000 for the first two years and $25,000 following the third year. Second, if during the first 104 weeks after the loan payments commence, the franchisee has maintained a purchase average of at least $8,400 per week (not including the Starter Inventory), Cornwell Quality Tools will issue a further open account credit of $10,000. Third, if during the first 156 weeks after the loan payments commence, the franchisee has maintained a purchase average of at least $8,400 per week (not including the Starter Inventory or additional inventory purchased with the $10,000 credit), Cornwell Quality Tools will issue a further open account credit of $15,000.
Additionally, if at any time within 36 months of the Start Date a franchisee has introduced at least 3 new dealers to Cornwell Quality Tools, the inventory portion of the Note will be deemed satisfied in full without the requirement of further payments, and any partial-year payments to the date of Note satisfaction will be credited to the franchisee's open account. However, if a franchisee fails to satisfy the average purchase requirement and has not introduced a new dealer during the preceding 52 weeks, their status as a Franchise Developer may be terminated by Cornwell Quality Tools. The Note may then be declared in default and accelerated, including accrued time-price charges and late charges.