What is the interest rate applied to late payments from Belocal franchisees?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
All late payments shall bear interest at the lesser of 1.5% per month or the highest rate permissible under applicable law, calculated daily and compounded monthly.
Franchisee shall also reimburse N2 for all reasonable costs incurred by N2 in collecting any late payments, including, without limitation, attorneys' fees.
In addition to all other remedies available under this Agreement or at law (which N2 does not waive by the exercise of any rights hereunder), N2 shall be entitled to suspend the provision of any Services if the Franchisee fails to pay any amounts when due hereunder and such failure continues for 7 days following written notice thereof.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, late payments are subject to an interest rate. Specifically, all late payments will accrue interest at a rate of 1.5% per month, or the highest rate permissible by law if that is lower. This interest is calculated daily and compounded monthly.
In practical terms, this means a Belocal franchisee who fails to make timely payments will incur additional charges. The interest accrues daily, so even a short delay can result in extra costs. The compounding of interest monthly means the interest itself starts earning interest, increasing the total amount owed over time.
Furthermore, Belocal franchisees are responsible for covering any expenses Belocal incurs while collecting late payments, including reasonable attorney's fees. Belocal also retains the right to suspend services if a franchisee's failure to pay continues for seven days after receiving written notice. This could disrupt the franchisee's operations and revenue generation. Prospective franchisees should be aware of these financial implications and ensure they have sufficient capital and financial management skills to avoid late payments and the associated penalties.