When does interest on overdue amounts begin to accrue for an Alloy franchise?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
penses to be paid include your attendees' |
| Name of Fee (1) | Amount | Date Due | Remarks |
|---|---|---|---|
| travel, lodging, meals, and wages | |||
| Insufficient Funds/Late Report Fee | $100 fee for late report/late payment, with fee increasing by $50 for each subsequent late report/late payment (up to a maximum of $250 for the fourth and any subsequent late report/late payment | On demand, if incurred | You must pay us this fee if there are not sufficient funds in your bank account to process payments owed to us and/or our affiliates or you are late in submitting reports. If you incur this fee three times in any 12 month period, we may terminate your Franchise Agreement without giving you the right to cure the default |
| Interest on Overdue Amounts | 12% per annum or the highest legal contract rate, whichever is less | Upon billing | Payable on all overdue amounts. Interest accrues from the original |
Source: Item 6 — OTHER FEES (FDD pages 15–20)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, interest on overdue amounts begins to accrue from the original due date until the payment is received in full. The interest rate is 12% per annum or the highest legal contract rate, whichever is less. This applies to all overdue amounts owed to Alloy.
For a prospective Alloy franchisee, this means that it is crucial to pay all fees and other amounts due to Alloy on time. Failure to do so will result in interest charges accruing from the moment the payment is due. The 12% annual interest rate, while potentially standard, can add up quickly, especially on larger overdue balances. Franchisees should ensure they have sufficient funds to cover all payments to avoid incurring these charges.
It is also important to note that Alloy can also charge an Insufficient Funds/Late Report Fee of $100 for late payments, which increases by $50 for each subsequent late report/late payment up to a maximum of $250. If this fee is incurred three times in any 12-month period, Alloy may terminate the Franchise Agreement without giving the franchisee the right to cure the default. Therefore, franchisees must prioritize timely payments and accurate reporting to maintain a good standing with Alloy and avoid potential penalties or termination.