What is the maximum amount Baya Bar can charge for collection costs?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
t. |
| (1) | (2) | (3) | (4) |
|---|---|---|---|
| Fees (1) | Amount | Due Date | Remarks |
| Insufficient Funds Fee | $50 per occurrence | On demand, if incurred | Payable if there are insufficient funds in your account to pay fees due to us. If you incur three insufficient funds fees in any 12-month period, we have the right to terminate your Franchise Agreement. |
Source: Item 6 — OTHER FEES (FDD pages 11–16)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, if Baya Bar incurs costs while trying to collect payments owed by a franchisee, the franchisee is responsible for reimbursing those costs. However, the maximum amount Baya Bar can charge for these collection costs is $250. This amount covers Baya Bar's reasonable costs, including attorney's fees, associated with the collection efforts.
This means that if a Baya Bar franchisee fails to make timely payments, they could be liable not only for the overdue amount but also for collection costs up to $250. This is in addition to any other fees or penalties that may apply due to late payment or default, such as interest on overdue amounts.
Prospective franchisees should be aware of this potential expense and ensure they have sufficient financial resources to meet their obligations to Baya Bar. Understanding the terms for late payments and collections is crucial for maintaining a healthy financial relationship with the franchisor and avoiding additional costs.