How are payments structured for Dryer Vent Squad financing?
Dryer_Vent_Squad Franchise · 2024 FDDAnswer from 2024 FDD Document
| 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 |
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 payment structure depends on whether the franchisee purchases a single or double territory. For a single territory, Dryer Vent Squad may finance up to $14,000 of the initial franchise fee, requiring a minimum down payment of $21,000. For a double territory, they may finance up to $28,000 of the initial franchise fee, with a minimum down payment of $42,000. The term for repayment is up to two years for both territory types, with a 10% APR finance charge.
The payment terms require monthly installments of principal and interest over the two-year repayment period. There is no penalty for early prepayment. Dryer Vent Squad requires a personal guaranty from the franchisee and, if the franchisee is a corporate entity, from each individual owner. Additionally, Dryer Vent Squad requires a security agreement related to the assets of the franchised business and the filing of a UCC-1 as additional security.
In case of default, the franchisee is personally liable for the amount financed, plus interest, collection costs, and legal fees. Default can also lead to the termination of the Franchise Agreement and loss of franchise rights, along with other legal and equitable remedies available to Dryer Vent Squad. The franchisee also waives their right to notice of default and loses certain defenses. Dryer Vent Squad also has the right to terminate the franchise and acquire the rights to operate the Dryer Vent Squad Business directly if the franchisee fails to repay the loan.