When is interest charged on overdue payments to Bananas Smoothies Frozen Yogurt, and at what rate?
Bananas_Smoothies_Frozen_Yogurt Franchise · 2025 FDDAnswer from 2025 FDD Document
cture_0.jpeg)
| Type of Fee 1 | Amount | Due Date | Remarks |
|---|---|---|---|
| We may increase the required minimum, but in no case shall the Fund be increased to more than a total of 3% of Gross Sales. | |||
| Site evaluation | Out-of-pocket expenses for visiting and inspecting proposed site | As incurred | Payable only if on-site inspection of proposed site is necessary. We reserve the right to charge a fee for conducting evaluations although a fee is not imposed at this time. |
Source: Item 6 — OTHER FEES (FDD pages 17–19)
What This Means (2025 FDD)
According to Bananas Smoothies Frozen Yogurt's 2025 Franchise Disclosure Document, interest is charged on overdue payments. Specifically, interest accrues on overdue amounts after a grace period of ten (10) days. The interest rate applied is the lesser of 1½% per month or the maximum rate permitted by law.
For a prospective Bananas Smoothies Frozen Yogurt franchisee, this means that it is crucial to make all payments on time to avoid incurring interest charges. The 1½% monthly interest rate can translate to a significant annual percentage rate (APR), so even a short delay in payment can result in substantial additional costs. Franchisees should ensure they have systems in place to track due dates and make timely payments to Bananas Smoothies Frozen Yogurt.
It's important to note that the interest rate is capped at the maximum rate permitted by law, which may vary depending on the franchisee's location. This provision protects franchisees from excessively high interest rates that might otherwise be imposed. However, franchisees should still prioritize timely payments to avoid any interest charges altogether. This is a fairly standard practice in franchising, as franchisors need to ensure they receive payments promptly to maintain their own financial stability and support the franchise system.