At what rate does interest accrue on 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, all unpaid amounts owed to Alloy will accrue interest. The interest rate is set at 12% per annum, or the maximum contract rate of interest permitted by the governing law, whichever amount is less. This interest begins accruing from the date the amount was initially due.
This means that if a franchisee fails to pay fees or other amounts owed to Alloy on time, they will be subject to interest charges. The specific rate will depend on both the 12% annual rate and any applicable state laws that may set a maximum allowable interest rate. Franchisees should be aware of these potential charges and ensure timely payment to avoid incurring additional costs.
Furthermore, in the event that the Franchise Agreement is terminated due to a franchisee's default, the franchisee will be responsible for all damages, costs, and expenses incurred by Alloy, including reasonable attorneys' fees. The franchisee is also liable for any costs Alloy incurs after the termination while enforcing the agreement, such as obtaining injunctive relief. This highlights the importance of adhering to the terms of the Franchise Agreement to avoid potential financial repercussions.