From what date does interest accrue on overdue amounts under the Bevaris Alliance agreement?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
- 25.2 Interest. If any party fails to make any payment due to the other under this agreement by the due date for payment, then, without limiting the other party's remedies under clause 20 and clause 21, the defaulting party shall pay interest on the overdue amount at the rate of 10% per annum or the maximum percentage of interest allowed by law, whichever is greater. Such interest shall accrue on a daily basis from the due date until actual payment of the overdue amount, whether before or after judgment. The defaulting party shall pay the interest together with the overdue amount. In relation to payments disputed in good faith, interest under this clause is payable only after the dispute is resolved, on sums found or agreed to be due, from the due date until payment.
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to the 2024 Bevaris Alliance Franchise Disclosure Document, if a franchisee fails to make a payment by the due date, interest will accrue on the overdue amount. This interest accrues on a daily basis starting from the original due date until the payment is actually made, regardless of whether this is before or after a legal judgment. The interest rate applied will be 10% per annum, or the maximum percentage allowed by law, whichever is greater.
This means that Bevaris Alliance franchisees need to be diligent in making payments on time to avoid incurring interest charges. The interest applies to all overdue amounts, and it begins accruing immediately from the due date. Even if the franchisee eventually pays the overdue amount, they will still be responsible for the accrued interest.
However, there is an exception for payments that are disputed in good faith. In such cases, interest is only payable after the dispute is resolved, and it applies only to the sums that are found or agreed to be due. The interest in these disputed cases still accrues from the original due date until the payment is made. This clause encourages franchisees to resolve disputes quickly to minimize potential interest charges.