Under what condition might Flowerama offer financing for remodeling and/or signage costs?
Flowerama Franchise · 2024 FDDAnswer from 2024 FDD Document
ou 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, Flowerama may offer franchisees the opportunity to finance remodeling and/or signage costs if they are granted a renewal term. The financing can be up to $30,000. Offers of financing are made at Flowerama's sole discretion on a case-by-case basis.
To qualify for any financing from Flowerama, a franchisee must meet Flowerama's criteria, including having a minimum credit score of 650. If Flowerama offers financing, the franchisee must sign Flowerama's form of Promissory Note. If the franchisee is an entity, its owners must guarantee payment of the Promissory Note under a Guarantee, and the franchisee must also grant Flowerama a security interest in the assets of the Flowerama Center under Flowerama's form of Security Agreement.
Financing is generally repaid over 1 year with interest at a rate of 7% per annum, though the length of time to repay and the interest rate may vary on a case-by-case basis. If Flowerama offers financing for multiple purposes, the franchisee may have to sign multiple Promissory Notes, Guarantees, and Security Agreements. This financing option provides an opportunity for existing franchisees to upgrade their Flowerama Center when renewing their franchise agreement, subject to meeting Flowerama's financial criteria and approval.