What is the maximum legal interest rate that can be charged on late payments for an All Team franchise?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
If any or all of the amounts due under this Agreement are not paid when due, ATFC shall have the right to charge interest on late payments equal to the lesser of one and one-half percent (1½%) per month or the maximum legal rate in the jurisdiction where the Agency is located.
FRANCHISEE acknowledges that the foregoing does not constitute ATFC agreement to accept payments after same are due or a commitment by ATFC to extend credit to, or otherwise finance FRANCHISEE's operation of the Agency.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, if a franchisee fails to make payments on time, All Team has the right to charge interest on the overdue amount. The interest rate will be the lesser of two options: one and one-half percent (1½%) per month, or the maximum legal rate permitted in the jurisdiction where the All Team agency is located.
This means that an All Team franchisee could face a significant interest charge on late payments, up to 18% annually (1.5% per month), unless the state law where the agency operates sets a lower maximum interest rate. It is important for prospective franchisees to understand the laws in their specific state regarding maximum legal interest rates to know which limit would apply.
All Team also clarifies that their right to charge interest on late payments does not obligate them to accept late payments or extend credit to the franchisee. This reinforces that franchisees must manage their finances responsibly and ensure timely payments to avoid penalties and maintain a good financial standing with All Team.