What is the minimum late payment charge that Aw franchisees will incur?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
us (once we have determined the true and correct amount of Gross Revenue), we will transfer from your account the balance of the royalty and Marketing Fund contribution due or we will credit the excess against the next transfer for royalty and Marketing Fund contribution due, as applicable.
- 10.6 Interest on Late Payments. To encourage prompt payment of all amounts due to us and to cover the costs and expenses involved in handling and processing late payments, you will pay a late payment charge equal to the greater of (i) One Hundred Fifty Dollars ($150.00) or (ii) one and one-half percent (1 ½%) per month on all payments due to us during the period of time said payments are due and unpaid, but no more than the highest interest rate permitted by law. (You acknowledge that the inclusion of this Paragraph in this Agreement does not mean we agree to accept or condone late payments, nor does it indicate that we have any intention to extend credit to, or otherwise finance your operation of the Papa Ray's Pizza Restaurant.) We shall have the right to transfer from your bank account des
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, franchisees may incur a late payment charge. This charge is the greater of two options: a flat fee of $150.00, or 1.5% per month on the overdue amount. However, the late fee will not exceed the highest interest rate permitted by law.
This means that even if 1.5% of the unpaid amount is less than $150, Aw will charge the franchisee a minimum of $150 for a late payment. For example, if a franchisee owes $100 and is late on the payment, the 1.5% charge would only be $1.50. However, Aw will still charge the franchisee $150 because it is the greater of the two amounts.
Aw also has the right to transfer funds from the franchisee's designated bank account to cover any interest owed. Additionally, franchisees are responsible for any service charges Aw incurs due to rejected electronic transfers or dishonored checks.