What is the consequence of late payments for a Benjamin Franklin Plumbing franchise?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
ient funds. If we permit you to pay with a credit card, you agree to reimburse us for the resulting charges we incur, subject to applicable law.
- 7.7. Late Reports and Estimated Payments. If Franchisee's Gross Revenue report required by Section 8 is not received when due, (i) all payments owed by Franchisee for such time period shall be deemed overdue until the reports are received by Franchisor, regardless of whether payment was actually made; (ii) Franchisee shall be responsible for applicable late fees and interest under Section 7.8 and (iii) Franchisor will have the right to estimate Gross Revenue (and Franchisee agrees that 15% greater than previously reported Gross Revenue is a reasonable estimate, among other methods to estimate) and to draft from Franchisee's bank account the estimated amount due for royalties, Brand Fund contributions, and any other charges that are calculated based on Gross Revenue. When you provide the delinquent report(s), we will reconcile any difference between the estimated amount and the actual charges due for the period, and, if an overpayment, we will credit you on your next payment obligation to us.
- 7.8. Interest and Late Fees. If any payment to us is overdue, you are required to pay us, in addition to the overdue amount, interest on the overdue amount from the date it was due until paid, at the rate of 12% per annum or the maximum rate permitted by law, whichever is less. In addition, we will have the right to charge a late fee of $100 for the second occurrence of a payment or report that is more than thirty (30) days past due, $200 for the third such occurrence, and $300 for the fourth and each subsequent occurrence.
Source: Item 23 — RECEIPTS (FDD pages 88–312)
What This Means (2025 FDD)
According to Benjamin Franklin Plumbing's 2025 Franchise Disclosure Document, if a franchisee's payment is overdue, they must pay interest on the overdue amount from the date it was due until paid. The interest rate is 12% per annum or the maximum rate permitted by law, whichever is less.
In addition to interest, Benjamin Franklin Plumbing has the right to charge late fees. The late fee is $100 for the second occurrence of a payment or report that is more than thirty days past due, $200 for the third occurrence, and $300 for the fourth and each subsequent occurrence. These late fees are intended to compensate Benjamin Franklin Plumbing for its administrative costs incurred in enforcing the franchisee's payment obligations.
Furthermore, if a franchisee's Gross Revenue report is not received when due, all payments owed by the franchisee for that period are considered overdue until the reports are received, regardless of whether payment was actually made. In this case, the franchisee will be responsible for applicable late fees and interest. Benjamin Franklin Plumbing also has the right to estimate Gross Revenue (using a reasonable estimate such as 15% greater than previously reported Gross Revenue) and draft the estimated amount due for royalties, Brand Fund contributions, and any other charges calculated based on Gross Revenue from the franchisee's bank account. If an underpayment of Royalty Fees or other amounts due is discovered, the franchisee is required to promptly pay the amount due, along with applicable late fees and interest. These measures ensure that Benjamin Franklin Plumbing franchisees adhere to the payment terms outlined in the franchise agreement.