How is interest calculated under the Cr3 American Exteriors promissory note?
Cr3_American_Exteriors Franchise · 2025 FDDAnswer from 2025 FDD Document
Maker will enroll in the automatic fund transfer program. Repayment of the principal and interest under this Note will be made by deducting interest then principal amounts from revenue, then remitting the balance to Maker. Interest will be calculated based on a 360-day year consisting of twelve (12) months of 30 days each.
Source: Item 23 — RECEIPTS (FDD pages 53–150)
What This Means (2025 FDD)
According to Cr3 American Exteriors's 2025 Franchise Disclosure Document, interest on the promissory note is calculated based on a 360-day year. This 360-day year is comprised of twelve months, with each month consisting of 30 days.
This method of calculation is commonly referred to as the "banker's year" and simplifies interest calculations. However, it's important to note that this method results in a slightly higher interest amount compared to using the actual number of days in a year (365 days) because the daily interest rate is multiplied by 360 instead of 365.
Prospective Cr3 American Exteriors franchisees should be aware of this calculation method, as it will affect the total amount of interest paid over the life of the promissory note. It is also important to note that repayment of the principal and interest under this note will be made by deducting interest then principal amounts from revenue, then remitting the balance to the franchisee.