Is there a maximum interest rate Baya Bar can charge on overdue amounts?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
- 6.3 Interest.
Any and all amounts that shall become due and owing from Franchisee to Franchisor under the terms hereof shall bear interest from the date due until paid at the rate of 18% per annum or at the highest rate permitted by law, whichever is lower.
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, any amounts due from the franchisee to Baya Bar will bear interest from the date the payment was due until it is paid. The interest rate is set at 18% per annum, but the agreement specifies that if the highest rate permitted by law is lower than 18%, then the legally permissible rate will apply instead.
This means that a Baya Bar franchisee could be charged interest on any overdue royalty fees, brand fund contributions, or other amounts owed to the company. The interest charge is in addition to a $50 late fee that Baya Bar may also impose for late payments or reports.
For a prospective franchisee, this highlights the importance of making timely payments to Baya Bar to avoid incurring interest charges and late fees. It also indicates that the actual interest rate charged may vary depending on state or federal laws that limit interest rates.