What documents must a Flowerama franchisee sign if they receive financing from the franchisor?
Flowerama Franchise · 2024 FDDAnswer from 2024 FDD Document
anchise Agreement on or before October 1, 2025, we will waive payment of the entire Fruit Bouquets Initial Franchise Fee.
Franchisor Financing
If you meet our criteria, including a minimum credit score of 650, we may offer you the opportunity to finance up to $30,000, which may be used for build-out of your Center and/or purchase and installation of signage. In addition, if you choose to purchase the Fruit Bouquets Program, we may offer you the opportunity to finance up to an additional $30,000, which may be used for build-out costs and signage related to the Fruit Bouquets Business. We may also offer you the opportunity to finance up to an additional $30,000 of remodeling costs and/or signage costs, if you are granted a renewal term. We may also offer you the opportunity to finance up to an additional $30,000 of the Renewal Franchise Fee if you are granted a renewal term. Offers of financing are made to franchisees in our sole discretion on a case-by-case basis. If we offer financing to you, you must
sign our form of Promissory Note attached to this Disclosure Document as Exhibit G-1. If you are an entity, your owners must guarantee payment of the Promissory Note under a Guarantee attached to this Disclosure Document as Exhibit G-2, and you must also grant us a security interest in the assets of your Flowerama Center under our form of Security Agreement attached to this Disclosure Document as Exhibit G-3. Financing is generally repaid over 1 year with interest at the rate of 7% per annum. The length of time to repay and the interest rate may vary on a case by-case-basis.
Source: Item 5 — INITIAL FEES (FDD pages 13–15)
What This Means (2024 FDD)
According to Flowerama's 2024 Franchise Disclosure Document, if a franchisee receives financing from Flowerama, they must sign specific documents. The franchisee will sign Flowerama's form of Promissory Note, which is attached to the Disclosure Document as Exhibit G-1. If the franchisee is a business entity, its owners must guarantee payment of the Promissory Note under a Guarantee attached as Exhibit G-2. Additionally, the franchisee must grant Flowerama a security interest in the assets of their Flowerama Center using Flowerama's form of Security Agreement, attached as Exhibit G-3.
Flowerama may offer financing to qualified franchisees who meet their criteria, including a minimum credit score of 650. The financing can be used for build-out of the Flowerama Center, purchase and installation of signage, build-out costs, and signage related to the Fruit Bouquets Business. Flowerama may finance up to $30,000 for each of these purposes. Offers of financing are made at Flowerama's sole discretion on a case-by-case basis.
Financing is generally repaid over one year with interest at a rate of 7% per annum, but the repayment length and interest rate can vary. If Flowerama offers financing for multiple purposes, the franchisee may have to sign multiple Promissory Notes, Guarantees, and Security Agreements. This ensures that Flowerama has the necessary legal protections for each instance of financing provided to the franchisee.