What is the monthly interest rate charged on late payments to Aw?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
ue 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, if a franchisee makes a late payment, Aw charges a monthly interest rate of one and one-half percent (1 1/2%) on the unpaid amount.
In addition to the interest charge, Aw specifies that the late payment charge will be the greater of $150 or the 1 1/2% monthly interest. This means that even on small overdue amounts, the franchisee will be charged at least $150. The interest rate will not exceed the maximum rate permitted by law.
Aw also has the right to transfer funds from the franchisee's designated bank account to cover any interest owed. Furthermore, the franchisee is responsible for any service charges Aw incurs due to rejected electronic transfers or dishonored checks. This policy encourages franchisees to ensure they have sufficient funds available for payments to avoid additional fees.