What interest rate does B Bops charge on deficiencies found during an audit?

According to B Bops's 2025 Franchise Disclosure Document, if an audit reveals a deficiency in royalties or fees owed by the franchisee, B Bops charges interest on the overdue amount. The interest rate is one and one-half percent (1-1/2%) per month, or the maximum rate allowed by the law of the state in which the franchise is located, whichever is less. This interest accrues from the due date until B Bops receives full payment.

In practical terms, this means that if a B Bops franchisee underreports their gross sales, leading to a royalty or fee deficiency, they will not only have to pay the deficiency but also interest on that amount. The 1.5% monthly interest rate can add up quickly, so it is crucial for franchisees to maintain accurate records and pay all royalties and fees on time.

It's also important to note that the interest rate could be lower if the maximum legal interest rate in the franchisee's state is less than 1.5% per month. Franchisees should be aware of the usury laws in their state to understand the potential maximum interest rate. This policy encourages accurate financial reporting and timely payments from franchisees, protecting B Bops's revenue stream.