ITEM 10 FINANCING
The Initial Franchise Fee is
paid in full when you sign our Franchise Agreement; however, we may, at our
option, finance a portion of the Initial Franchise Fee in excess of the minimum
Initial Franchise Fee of $5,000 to assist in the purchase of your Franchised
Business. We do not provide financing for the payment of the minimum Initial
Franchise Fee of $5,000. If we do provide financing, the amount financed will
be payable in full no later than 6 months after we sign the Franchise
Agreement. You must sign a Promissory Note in our favor which will provide for
payment of the amount due with interest at a rate equal to the "Prime
Rate" of interest as published by the Western Edition of the Wall Street
Journal. Our Promissory Note is attached to the Franchise Agreement as Attachment
D. If you are a partnership, limited liability company or corporation, all
of your partners, members or shareholders must personally guarantee payment of
the Promissory Note. Our Guarantee is attached to the Franchise Agreement as Attachment
E. The Promissory Note is unsecured. We do not offer financing for any
other purpose. You may prepay the Promissory Note with no prepayment penalty.
If you default under the Promissory Note or the Guarantee, or if you are in
default under your Franchise Agreement, we may demand immediate payment of all
principal and interest due under the Promissory Note. You waive all rights of
presentment, protest and demand, notice of protest, demand, dishonor and
nonpayment of the Promissory Note, notice of acceleration, notice of intent to
accelerate, and any and all other similar notices, except the notice of default
to be given if you don''t make your payments under the Promissory Note. You are
not barred from asserting a defense against the lender, the lender''s assignee
or us, but if any legal action is brought to enforce or collect the Promissory
Note, the prevailing party is entitled to reasonable attorney''s fees and costs
of collection, in addition to any other relief to which that party may be
entitled. Please see Exhibit D to the Franchise Agreement for further
information.
With this exception, neither
we nor any affiliate offer direct or indirect financing to you or guarantee any
note, lease or obligation of yours in connection with the purchase or establishment
of your Franchised Business. We do not arrange financing from other sources or
receive direct or indirect payments for arranging financing. We do not sell or
assign commercial paper from franchisees to anyone, but reserve the right to do
so.
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