When does interest begin to accrue on overdue amounts for Bevaris Alliance?
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 Bevaris Alliance's 2024 Franchise Disclosure Document, if a party fails to make a payment by the due date, interest accrues on the overdue amount. The interest rate is 10% per annum, or the maximum percentage allowed by law, whichever is greater. This interest accrues on a daily basis from the due date until the actual payment is made, regardless of whether it's before or after a judgment. The defaulting party is responsible for paying both the overdue amount and the accrued interest.
However, there is an exception for payments disputed in good faith. In such cases, interest is only payable after the dispute is resolved, and it applies to the sums found or agreed to be due. The interest accrues from the original due date until the payment is made.
This clause ensures that Bevaris Alliance franchisees are incentivized to make timely payments. The relatively high interest rate of 10% (or the maximum legally permissible rate) can act as a deterrent against late payments. The exception for good faith disputes provides a mechanism to address legitimate disagreements without immediately incurring interest charges.