| SUMMARY OF TERMS |
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| PURPOSE: |
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Construction of a new location (multi-brand or single brand). Also includes
recently constructed locations that have been open for less than three months
prior to application date.
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Single brand conversion to multi-brand with ability to refinance existing
location as long as the refinance portion is the lesser of $500M or 50% of the
total conversion cost.
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Acquisition of locations from Pizza Hut, KFC and Taco Bell.
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Required upgrades outlined in individual brand franchise agreement.
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MATURITY/
AMORTIZATION: |
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5 years/15 years for fee simple collateral site.
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5 years/12 years for leasehold collateral site, not to exceed maximum (with
options) lease term.
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A nine month construction period will be allowed.
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| INTEREST RATE: |
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Cost of Funds plus 3.00% on fee simple collateral.
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Cost of Funds plus 3.50% on leasehold collateral.
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Interest rate is 50bps higher during nine month construction period.
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| LOAN AMOUNT: |
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$200,000 minimum per Loan. $5,000,000 maximum per Franchisee
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| INITIAL QUALIFICATION REQUIREMENTS: |
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A minimum 3 years operating experience as YUM! Brands franchisee;
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Must own three or more locations;
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Achieve minimum FCCR requirement of 1.2X on subject site and entity basis;
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Franchisee in good standing and not past due with royalties within the past
year
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| MAXIMUM ADVANCE RATE: |
Construction Loans:
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85% of total project costs. 85% of Land Value must be substantiated by
Appraisal.
Acquisition Loans:
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75% of total purchase price.
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| FEES & EXPENSES: |
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1.00% loan origination fee.
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All closing expenses including legal, filing and recording, title insurance,
and surveys.
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| GUARANTIES: |
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The Franchisee and all individuals that own more than 20% of the Franchisee
shall personally guarantee the Loan.
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| SCHEDULED PAYMENTS: |
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A monthly, level payment for the first 12 months: will be reset in 12 month
intervals computed to amortize the principal and accrued interest over the
remaining term.
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Prepayment premium will apply for first 18 months.
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Will be debited electronically on the tenth of each month.
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| SECURITY: |
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Fee sites: a first priority lien/security interest on the collateral sites.
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Leasehold sites: leasehold mortgages on leasehold sites.
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All Loans made to, or guaranteed by, a Franchisee shall be cross-collateralized
and cross- defaulted.
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Assignment of sale proceeds on subject site.
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If collateral site is closed, the site must be paid off.
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All Loans made to a Franchisee shall be cross-defaulted to Franchise
Agreements.
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