What is the interest rate charged on late payments to Best Brains?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
up to 6 months. Upon subsequent audits, conducted at random, if the franchise has a poor review, the royalty will remain at 18% and reestablish a Probationary Period. The additional 4% added to the royalty will be used toward Brand Development Fund. Upon a successful re-audit, the additional royalty fee may be removed an
Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, franchisees must pay interest on any overdue amounts. The interest rate is 2% per month, or the maximum rate permitted by law, calculated from the date the payment was originally due. In addition to interest, Best Brains also charges a $100 late fee if a franchisee submits a check or electronic transfer that is returned for insufficient funds (NSF), makes a late payment, or fails to provide required reports and financial statements on time.
This means that if a Best Brains franchisee is late on any payments owed to the company, they will incur interest charges on the outstanding balance. The 2% monthly interest rate can quickly add up, so it's crucial for franchisees to make timely payments to avoid these extra costs. Franchisees should also be aware of the additional $100 late fee for NSF checks, late payments, or failure to submit required reports, which further emphasizes the importance of maintaining good financial and administrative practices.
It is common practice in the franchise industry to charge interest on late payments. The specific interest rate and late fee amounts can vary from franchise to franchise, so prospective franchisees should carefully review the FDD and franchise agreement to understand the payment terms and potential penalties for late payments. Franchisees should also ensure they have systems in place to track payments and deadlines to avoid incurring these charges.