What is the late charge for overdue payments from a Beggars Pizza franchisee?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
Any payment or Gross Sales report not actually received by Franchisor on or before such date will be deemed overdue.
If any payment or Gross Sales report is overdue, Franchisee must pay Franchisor immediately upon demand, in addition to the overdue amount, a "late charge" on such amount from the date it was due until received by Franchisor, at the rate of two percent (2%) per month on the overdue amount, or the maximum rate permitted by applicable law.
Entitlement to such late charges will be in addition to any other remedies Franchisor may have. Franchisee will not be entitled to set off any payments required to be made under this Section 4 against any monetary claim it may have against Franchisor. Franchisor may require Franchisee to make any or all payments under the Agreement to an affiliate of Franchisor.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, if a franchisee's payment or Gross Sales report is not received on time, it will be considered overdue. In such cases, Beggars Pizza will charge a late fee of two percent (2%) per month on the overdue amount. This charge is calculated from the original due date until the payment is received. However, the FDD also states that the late charge will not exceed the maximum rate permitted by applicable law, suggesting that the 2% rate may be adjusted downward to comply with local regulations.
This late charge applies to all payments required by Section 4.2 and Section 12 of the franchise agreement. These sections likely cover royalty fees, advertising fees, and other payments due to Beggars Pizza. The franchisee is responsible for ensuring that all payments and Gross Sales reports are submitted on time to avoid incurring these late charges.
The imposition of late charges is in addition to any other remedies that Beggars Pizza may pursue for overdue payments or reports. This means that Beggars Pizza could take further action, such as legal proceedings or termination of the franchise agreement, if payments are not made in a timely manner. The franchisee is not entitled to offset any payments owed to Beggars Pizza against any monetary claim they may have against Beggars Pizza, meaning that the franchisee cannot deduct any amounts they believe Beggars Pizza owes them from their royalty or other payments.
Beggars Pizza also retains the right to have franchisees make payments to an affiliate of Beggars Pizza, which means the payment terms and conditions could be subject to change. Prospective franchisees should be aware of these late payment terms and ensure they have sufficient financial resources and systems in place to meet all payment obligations to Beggars Pizza on time.