What interest rate applies to unpaid amounts owed to Alloy after termination or expiration?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
All unpaid amounts will bear interest at the rate of 12% per annum or the maximum contract rate of interest permitted by governing law, whichever is less, from and after the date of accrual. In the event of termination for any default by you, the sums due will include all damages, costs, and expenses, including reasonable attorneys' fees and expenses, incurred by us as a result of your default. You also must pay to us all damages, costs and expenses, including reasonable attorneys' fees and expenses, that we incur subsequent to the termination or expiration of this Agreement in obtaining injunctive or other relief for the enforcement of any provisions of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, any unpaid amounts owed to Alloy will incur interest. The interest rate is set at 12% per annum, or the maximum contract rate of interest permitted by law, whichever is less. This interest begins accruing from the date the amount was originally due.
This means that if a franchisee fails to pay any amounts owed to Alloy, whether during the term of the agreement or after termination or expiration, they will be subject to interest charges. The 12% rate provides a clear benchmark, but the clause also protects the franchisee in case state laws mandate a lower maximum interest rate. Franchisees should be aware of their state's regulations regarding contract interest rates to understand the potential financial implications.
Furthermore, in the event of termination due to a franchisee's default, the franchisee will be responsible for all damages, costs, and expenses incurred by Alloy, including reasonable attorney's fees. This could significantly increase the amount owed beyond the initial unpaid balance, so franchisees should strive to meet all financial obligations to avoid these additional costs and potential interest charges.