What is the interest rate applied to late payments owed to Benihana, and how is it calculated?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
If any inspection, review or audit reveals that Franchisee understated any payments in any report submitted to BNC, then BNC shall have the right to immediately debit from Franchisee's bank account or require Franchisee to immediately pay the amount understated to BNC, as well as interest from the date such amount was due until debited or paid, at the rate of 18% per annum, or the maximum rate permitted by law, whichever is less.
If an inspection, review or audit discloses an understatement in any report of 3% or more, BNC may, in addition to repayment of monies owed with interest, debit from Franchisee's bank account or require Franchisee to reimburse BNC for any and all costs and expenses incurred by BNC in connection with the inspection, review or audit, including, without limitation, travel, lodging, wages and reasonable accounting and legal costs.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, if an inspection, review, or audit reveals that a franchisee understated any payments in a report submitted to Benihana, the franchisee will have to pay the understated amount to Benihana. Benihana also has the right to immediately debit the amount from the franchisee's bank account.
In addition to the understated payments, Benihana will also charge interest on the amount from the date it was due until it is debited or paid. The interest rate is 18% per annum, or the maximum rate permitted by law, whichever is less.
Furthermore, if the understatement in any report is 3% or more, Benihana may also debit the franchisee's bank account or require the franchisee to reimburse Benihana for all costs and expenses incurred in connection with the inspection, review, or audit. These costs include travel, lodging, wages, and reasonable accounting and legal costs, in addition to the repayment of monies owed with interest.