What documents are attached as Exhibit M related to financing for a Creative World School franchise?
Creative_World_School Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF INSURANCE | MINIMUM REQUIREMENT | |
|---|---|---|
| Property Insurance (Acord 28 - 2016 ) | $2,000,000 or replacement value | |
| Flood Insurance at FEMA maximum amount + additional as | $2,000,000 or Actual Cash | |
| available | Valuation | |
| General Liability Insurance (Acord 28) Rated A-VII or better | $1M/ occurrence $2M / | |
| (May include molestation) | Aggregate | |
| Automobile Insurance (Acord 28) Deductible $1000 or less | $1M per accident | |
| Student Accident Insurance - No deductible $10,000 AD&D | $20,000 per injury maximum | |
| Benefit | ||
| Umbrella Liability - (Acord 28) Rated A-VII or better | $3M per occurrence | |
| Professional Liability - (Acord 28) (Molestation included) | $1M per occurrence / $1M/Aggregate | |
| Workman's Compensation and Employer's Liability (Acord | $500K/$500K/$500K | |
| 28) | ||
| Obligation | Section in Agreement | |
| a. Site selection and acquisition/lease | Sections 2.1 and 4; Deposit Agreement for Site Assessment (“Dep. Agmt”); Lease Assignment; Lease | |
| b. Pre-opening purchases/leases | Sections 4, 5 and 6.2; Lease Assignment; Dep. Agmt; Lease | |
| c. Site development and other pre- | Sections 4, 5, 6 and 7 | |
| opening requirements | ||
| d. Initial and ongoing training | Section 7 | |
| e. Opening | Sections 5.6, 5.7, 7.1 and 7.2 | |
| f. Fees | Sections 3, 6, 7.1, 7.3, 11.1, 12, 14.2 and 15.3; Section 1 Dep. Agmt; Lease | |
| g. Compliance with standards and | Sections 5, 7, 11 and 13 | |
| policies/Operating Manuals | ||
| h. Trademarks and proprietary information | Sections 8 and 9; Sections 2 and 3 Dep. Agmt; Conditional Assignment of Telephone Numbers and Listings and Internet Addresses | |
| i. Restrictions on products/services | Sections 5 and 11 | |
| offered | ||
| j. Warranty and customer service | None | |
| requirements | ||
| k. Territorial development and sales | Sections 2.1 and 5.1 | |
| quotas | ||
| l. On-going product/service | Sections 5, 11 and 12 | |
| purchases | ||
| m. Maintenance, appearance and | Sections 3, 5, 11.4 and 15.3 | |
| remodeling requirements | ||
| n. Insurance | Sections 5, 11.2 and 19 | |
| o. Advertising | Sections 5.7 and 12 | |
| p. Indemnification | Section 18.4; Section 3 of Lease Assignment; and Section 4 of Conditional Assignment of Telephone Numbers and Listings and Internet Addresses. | |
| q. Owner’s participation/ | Sections 2.4, 7, 10, and 11 | |
| management/staffing | ||
| r. Records and reports | Sections 11 and 13 | [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] |
ITEM 10 FINANCING
Although we do not offer any financing, our affiliate, Discount Preschool, in its sole discretion, may finance a portion of the Opening Package Fee up to $50,000 if you meet certain credit requirements. This financing is provided in conjunction with financing that you obtain in connection with the school building and/or land purchase for your Creative World School® Business. The following chart summarizes the terms of such financing, but the actual terms and conditions will be set forth in a Promissory Note and Security Agreement and such other documents as you and Discount Preschool agree upon. The
Source: Item 10 — FINANCING (FDD pages 27–29)
What This Means (2025 FDD)
According to the 2025 Creative World School Franchise Disclosure Document, Exhibit M includes the form of Promissory Note, Security Agreement, and UCC-1 Financing Statement. These documents are related to potential financing that may be offered by Creative World School's affiliate, Discount Preschool.
Specifically, Discount Preschool may, at its discretion, finance a portion of the Opening Package Fee up to $50,000 for qualifying franchisees. This financing is contingent upon the franchisee obtaining other financing related to the school building and/or land purchase. The Promissory Note outlines the terms of the loan, including repayment schedules and interest, while the Security Agreement grants Discount Preschool a security interest in the franchisee's assets, such as furniture, fixtures, equipment, and inventory, to secure the loan. The UCC-1 Financing Statement is a public record of this security interest.
Prospective Creative World School franchisees should carefully review these documents to understand the terms and conditions of the financing offered by Discount Preschool. Understanding the obligations and potential risks associated with the Promissory Note and Security Agreement is crucial before entering into any financing arrangement. Franchisees should also note that a default under any of the financing documents constitutes an event of default under the Franchise Agreement.