If Dryer Vent Squad provides financing, what document will the franchisee receive?
Dryer_Vent_Squad Franchise · 2024 FDDAnswer from 2024 FDD Document
the third-party financing provider. We do not guarantee your note, lease or obligation.
If we make financing available to you, we will provide a promissory note (a "Note") for the amount financed. You will be responsible for repayment of the Note, including finance charges and interest and, if you are a Corporate Entity, you individual owners must personally guaranty the repayment of the Note and the payment of all sums due under the Note. You are required to return an original signed copy of the Note to us. We have the right to assign your Note to a third party. Additionally, if you enter into a Note with us for a new Dryer Vent Squad Business, we require that you open the Dryer Vent Squad Business within six months of your receipt of the funding provided under the Note.
If we make financing available to you, the applicable financing terms are described below:
| Finance Type | e | Operating Territory Type: Single Territory | Operating Territory Type: Double Territory | |
|---|---|---|---|---|
| Amount Financed | Up to $14,000 of Initial Franchise Fee | Up to $28,000 of Initial Franchise Fee | ||
| Down Payment | Minimum of $21,000 | Minimum of $42,000 | ||
| Term | Up to two (2) years | Up to two (2) years | ||
| Finance Charges | Ten percent (10%) APR | Ten percent (10%) APR | ||
| Payment Amount | Depends on amount financed with repayment self-amortized over two (2) year repayment period with monthly installments of principal and interest paid monthly. | |||
| Payment Terms | Payable monthly over two (2) year repayment period with monthly installments of principal and interest paid monthly. No early pre-payment penalty. | |||
| Security Required | Personal guaranty by you and if you are a Corporate Entity then personal guaranty by each individual owner. Additional security in the form of a security agreement related to the assets of the Franchised Business and the filing of a UCC-1. | |||
| Liability Upon Default | Personal liability for the amount financed, plus interest, collection costs and legal fees. Additionally, default of Franchise Agreement and loss of franchise rights in the Franchised Business and other legal and equitable remedies available to us. | |||
| Loss of Legal Rights on Default | Cross-default of Franchise Agreement. Waiver of notice of default and loss of defenses | |||
| Referral Fee | Not applicable. | If you fail to repay your loan, we have the right to terminate your franchise and acquire the rights to operate your Dryer Vent Squad Business directly. We may, in our sole discretion, offer financing to new and existing franchisees who wish to expand with additional Territories. Note payments are not refundable. Note obligations are not refundable. If, at your request, we elect to make financing available to you, you must sign the Note at the time you sign the Franchise Agreement. A copy of the form Note is attached as Exhibit 7 to the Franchise Agreement. |
Under the Note terms, you will be waiving legal rights that include a waiver of your right to receive notices of default and other legal rights and defenses, including your right to diligence, demand, presentment for payment, notice of nonpayment and protest, and notice of amendments or modifications. You also waive any defense under the statute of limitations and allow that a confessed judgment may be taken against you.
Source: Item 10 — FINANCING (FDD pages 29–30)
What This Means (2024 FDD)
According to Dryer Vent Squad's 2024 Franchise Disclosure Document, if Dryer Vent Squad offers direct financing for the initial franchise fee, the franchisee will receive a promissory note, referred to as a "Note." The franchisee is then responsible for repaying the Note, which includes finance charges and interest. If the franchisee is a corporate entity, the individual owners must personally guarantee the repayment of the Note and all sums due under it. The franchisee must return an original signed copy of the Note to Dryer Vent Squad, and Dryer Vent Squad has the right to assign the Note to a third party.
Dryer Vent Squad requires that the franchisee open their Dryer Vent Squad Business within six months of receiving the funding provided under the Note. The franchisee must sign the Note when they sign the Franchise Agreement. A copy of the form Note is attached as Exhibit 7 to the Franchise Agreement.
The financing terms include waiving certain legal rights, such as the right to receive notices of default and other legal rights and defenses, including the right to diligence, demand, presentment for payment, notice of nonpayment and protest, and notice of amendments or modifications. The franchisee also waives any defense under the statute of limitations and allows that a confessed judgment may be taken against them. If the franchisee fails to repay the loan, Dryer Vent Squad has the right to terminate the franchise and acquire the rights to operate the Dryer Vent Squad Business directly. Note payments and obligations are not refundable.
The amount financed can be up to $14,000 for a single territory or up to $28,000 for a double territory, with a 10% APR. The repayment is self-amortized over a two-year period with monthly installments of principal and interest. Security required includes a personal guaranty and a security agreement related to the assets of the franchised business, along with the filing of a UCC-1. Defaulting on the loan results in personal liability for the amount financed, plus interest, collection costs, and legal fees, as well as default of the Franchise Agreement and loss of franchise rights.