What is the maximum contract rate of interest permitted by governing law for amounts owed to Alloy?
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 accrue interest. The interest rate will be the lesser of 12% per annum or the maximum contract rate of interest permitted by the governing law. This interest begins accruing from the date the amount becomes due.
This means that if a franchisee fails to pay Alloy on time, they will be charged interest on the outstanding balance. The specific interest rate will depend on the laws of the jurisdiction governing the franchise agreement. If the governing law specifies a maximum interest rate lower than 12%, that lower rate will apply. Otherwise, Alloy will charge 12% interest per year.
Franchisees should be aware of this provision and ensure timely payments to avoid incurring interest charges. It is also advisable to understand the maximum contract interest rate permitted by the relevant governing law to be fully informed of the potential interest charges. This is a fairly standard clause in franchise agreements, intended to protect the franchisor from losses due to late payments.