ITEM 10
FINANCING
Vanguard offers financing of
the balance of your initial franchise fee due after payment of a down payment
on signing the Franchise Agreement as described in Item 5. You must enter into
a promissory note attached as Exhibit B which requires payment of the balance
(the amount of which will depend on the volume of the package you buy) in 36-42
equal monthly installments commencing the month after you sign the note. The
interest rate on both notes is 10% per annum simple interest.
You may prepay the balance without
penalty. If you default in payment or breach your Franchise Agreement or if
certain other events occur like suspension of your business, the entire balance
can be declared immediately due, Vanguard can terminate your Franchise
Agreement and recover from you its costs of collection including attorneys
fees. If you operate the Sorvicefranchise as a corporation
or other business entity, the principal shareholder would need to personally
sigoRcgion requires the individual shareholders, partners and other equity
owners of that entity to personally guarantee the obligations and performance
under the note-as a co maker.. Vanguard has no practice or
present intent to assign or discount the note to a third party, but could do
so. In that case, you would lose the ability to raise claims against Vanguard
as defenses to payment of the note.
If you are offered and accept
additional business under Section 11.a of the Franchise Agreement, Vanguard may
offer, in its sole discretion, to finance a portion of the additional volume
fee. The amount financed and terms of financing are in Vanguard''s sole
discretion, but in most cases payments of the amount financed would be made in
equal monthly installments bearing 10% simple interest beginning the first
month following the month in which the service on the new account begins.
If you are an experienced
franchisee and need additional equipment to provide certain services to
accounts, Vanguard may but is not obligated to offer you the option to
"lease to own" that equipment from Vanguard under the form of
Equipment Lease attached to this Offering Circular
Disclosure Document as Exhibit D-4. The monthly payment and number of
installments due under the lease will vary based on the equipment leased. The
total cost of -acquiring the equipment under the lease would include Vanguard''s
acquisition cost of the equipment plus a mark up and 10% annual interest. You
may acquire the equipment meeting our standards from sources other than
Vanguard, but in all cases you must get Vanguard''s approval to provide Special
Services to your Vanguard accounts (see Item 16).
In practice, and as authorized
by Section 4 of the Franchise Agreement, Vanguard deducts your note payments,
equipment lease payments and any other amounts due to Vanguard each month from
the amounts collected from accounts you service.
Except for financing described
above, Vanguard does not offer direct or indirect financing. Vanguard does not
place financing with anyone, and does not receive any payment for the placement
of financing.
