Besides interest, what does Augusta Lawn Care intend for late payment charges to compensate?
Augusta_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
Any payment not received by Augusta Lawn Care when due will bear interest at the lesser of 1.5% per month or highest commercial contract interest rate late law allows per year or at the highest rate allowed by applicable law on the date when payment is due, whichever is less. Interest charges on late payments are intended to partially compensate Augusta Lawn Care for loss of use of the funds and for internal administrative costs resulting from late payment which would otherwise be difficult to measure precisely. The fact that such charges are imposed shall not be construed as a waiver of Augusta Lawn Care right to timely payment.
Source: Item 23 — RECEIPTS (FDD pages 44–184)
What This Means (2025 FDD)
According to Augusta Lawn Care's 2025 Franchise Disclosure Document, late payment charges are intended to cover more than just the loss of use of funds. Specifically, Augusta Lawn Care includes these charges to partially compensate for internal administrative costs that arise due to late payments. These costs are considered difficult to measure precisely, which is why a fixed charge is applied.
For a prospective Augusta Lawn Care franchisee, this means that if a payment is not made on time, they will incur interest charges, and these charges are also designed to offset the administrative burden the franchisor faces when dealing with overdue payments. The interest rate will be the lesser of 1.5% per month, the highest commercial contract interest rate allowed by law per year, or the highest rate allowed by applicable law on the date when payment is due.
It is important to note that the imposition of these late payment charges does not waive Augusta Lawn Care's right to timely payment. This underscores the importance of franchisees managing their finances carefully and ensuring that all payments are made on time to avoid these additional costs and potential further action from the franchisor.