What is the maximum interest rate that Angry Chickz can charge on underpaid amounts discovered during an audit?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Audit | Cost of audit plus interest3 on the underpayment at the highest rate allowable by law (not to exceed 18%). | Upon demand | You must pay the cost of the audit if the audit shows an under- reporting or under-recording of 2% or more, three times within any 36- month period or 5% or more during any reporting period. |
(3) Interest begins from the date of the underpayment.
Source: Item 6 — OTHER FEES1 (FDD pages 11–15)
What This Means (2025 FDD)
According to Angry Chickz's 2025 Franchise Disclosure Document, if an audit reveals under-reporting or under-recording of sales by 2% or more three times within a 36-month period, or 5% or more during any reporting period, the franchisee is responsible for covering the audit costs. Additionally, Angry Chickz can charge interest on the underpaid amount.
The maximum interest rate Angry Chickz can charge on the underpaid amount is the highest rate allowable by law, but it cannot exceed 18%. This interest begins accruing from the date of the underpayment. This means that if a franchisee is found to have underpaid royalties, they will not only have to pay the underpaid amount and the cost of the audit, but also interest on the underpaid royalties from the date the payment was originally due.
It is important for prospective Angry Chickz franchisees to maintain accurate and transparent records of their sales to avoid triggering an audit and incurring these additional costs. Franchisees should also be aware of the specific laws in their jurisdiction regarding interest rates, as the 'highest rate allowable by law' may be lower than 18%.