What is the estimated monthly payment for a $19,000 loan financed by Deka Lash?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
| Item Financed | Initial Franchise Fee for any additional unit rights acquired after 24 months of signing of a Franchise Agreement |
|---|---|
| Source of Financing | Us |
| Down Payment | 50% |
| Amount Financed | 50% |
| Interest Rate | 10% Annual Percentage Rate (A.P.R.) |
| Period of Repayment | 60 months |
| Monthly Payment | $ 404 per month on a $19,000 loan |
| Security Required | Personal Guaranty |
| Whether a Person Other than the Franchisee Must Personally Guarantee the Debt | If the franchisee is an entity, the owners of the franchisee entity must personally guarantee the debt |
| Prepayment Penalty | None |
| Liability Upon Default | Termination of Franchise Agreement; you must pay entire amount due, our attorney fees, and court costs in collecting debt. |
| Waiver of Defenses or Other Legal Right on Default | Waiver of right to jury trial; homestead and other exemptions; waiver of presentment, demand, protest, notice of dishonor. |
Source: Item 10 — FINANCING (FDD pages 31–32)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, after a franchisee has been operating for at least 24 months, Deka Lash may offer financing for the initial franchise fee for additional units. The availability and amount of financing depend on fund availability and the franchisee's creditworthiness.
The FDD outlines specific terms for a sample financing scenario. If Deka Lash finances 50% of the initial franchise fee for additional units, with the franchisee providing a 50% down payment, the loan would carry a 10% annual percentage rate (APR). The repayment period is set at 60 months. Based on these terms, the estimated monthly payment on a $19,000 loan would be $404.
The loan is secured by a personal guaranty. If the franchisee is a business entity, the owners of that entity must personally guarantee the debt. There is no prepayment penalty, allowing franchisees to pay off the loan early without incurring extra charges. However, default on the loan results in termination of the Franchise Agreement, and the franchisee is liable for the entire outstanding amount, including Deka Lash's attorney fees and court costs incurred in collecting the debt. The franchisee also waives certain legal rights, including the right to a jury trial and certain exemptions, in the event of default.
It is important to note that Deka Lash does not guarantee any notes, leases, or obligations of its franchisees. The FDD also states that Deka Lash does not have any past or present intention to sell, assign, or discount any notes, contracts, or other instruments signed by franchisees to any third party.