How is interest calculated 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, Bevaris Alliance will charge interest on the overdue amount. The interest rate will be the greater of 10% per annum or the maximum percentage of interest allowed by law. This interest accrues daily from the original due date until the payment is made, regardless of whether it's before or after a legal judgment. The franchisee is responsible for paying both the overdue amount and 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 determined to be due. The interest accrues from the initial due date until the payment date.
This clause ensures that Bevaris Alliance is compensated for late payments, while also providing a reasonable exception for legitimate disputes. Franchisees should be aware of this policy and ensure timely payments to avoid incurring interest charges. It is also important to note the exception for disputed amounts, which allows for resolution before interest is applied.