Terms Sheet

Summary of Terms

Download pdf version: Yum Capital Loans Term Sheet – 2014

PURPOSE:

1. Construction of a new location. Also includes recently constructed locations that have been open for less than three months prior to application date.

2. Acquisition of locations from Pizza Hut, KFC and Taco Bell.

3. Required remodel/upgrades outlined in individual brand franchise agreement. Able to refinance existing debt on location provided that refinance portion is the lesser of $500M or 100% of the total remodel/upgrade cost.

MATURITY/ AMORTIZATION:

5 years/15 years for fee simple collateral site.

5 years/12 years for leasehold collateral site, not to exceed maximum (w/ options) lease term. A nine month construction period will be allowed.

INTEREST RATE:

Cost of Funds (currently 30-day LIBOR + 1.75%) plus 2.00% on fee simple collateral.

Cost of Funds (currently 30-day LIBOR + 1.75%) plus 2.25% on leasehold collateral.

Interest rate is 50 bps higher during nine-month construction period.

LOAN AMOUNT:

$200,000 minimum per Loan. $5,000,000 maximum per Franchisee

INITIAL QUALIFICATION REQUIREMENTS:

  • A minimum 2 years operating experience as YUM! Brands franchisee;
  • Must own two or more locations;
  • Achieve minimum FCCR requirement of 1.2X on subject site and entity basis;
  • Franchisee in good standing and not past due with royalties within the past year
  • Meet the minimum score as prescribed by the “Credit Scoring Matrix” guidelines.

MAXIMUM ADVANCE RATE:

  • 85% of total project costs/acquisition price.
  • 85% of Land Value must be substantiated by Appraisal for all fee simple construction loans.

FEES & EXPENSES:

  • 1.00% loan origination fee.
  • All closing expenses including legal, filing and recording, title insurance, and surveys.

GUARANTIES:

  • The Franchisee and all individuals that own more than 20% of the franchised entity shall personally guarantee the Loan.

SCHEDULED PAYMENTS:

  • 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.
  • Prepayment premium will apply for first 18 months.
  • Will be debited electronically on the tenth of each month.

SECURITY:

  • Fee sites: a first priority lien/security interest on the collateral sites.
  • Leasehold sites: leasehold mortgages on leasehold sites.
  • All Loans made to, or guaranteed by, a Franchisee shall be cross-collateralized and cross-defaulted.
  • Assignment of sale proceeds on subject site.
  • If collateral site is closed, the site must be paid off.

Call 888.216.0404

The Summary Terms outlined above are for discussion purposes only and do not represent a commitment by YUM! Capital to extend or to arrange for the extension of credit to any person. Furthermore, the Summary Terms are not exhaustive as to the terms and conditions that would be included in definitive credit documentation or that would ultimately be required to consummate the transaction contemplated.

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