What is the annual Interest Charge on past due royalties for a Beehive Homes franchise?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition to late charges, delinquent payments will be assessed interest at eighteen percent (18%) per annum or any lower maximum rate of interest allowable under the laws of the state in which YOUR Bee Hive Home is located from the due date until the date paid.
Source: Item 6 — OTHER FEES (FDD pages 11–13)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, if a franchisee fails to pay royalties on time, they will incur an interest charge. The annual interest charge on past due royalties is 18%, though this may be lower if state law requires a lower maximum rate. This interest is calculated from the date the payment was originally due until the date it is actually paid.
In addition to the interest charge, Beehive Homes also assesses a late charge of 10% on the past due royalty balance. This means that franchisees need to be diligent in ensuring timely royalty payments to avoid these additional costs. The franchisor also has the right to examine the franchisee's books and records, and if an examination reveals a discrepancy of 2% or more, the franchisee will be responsible for reimbursing the franchisor for the cost of the examination.
Franchisors commonly charge interest on late payments, and an 18% annual rate is within the typical range. Franchisees should be aware of these potential costs and factor them into their financial planning. It is important to note that the interest charge is applied 'per annum,' meaning it is an annual rate, and the actual interest paid will depend on how long the royalty payment is overdue.