Is interest payable on disputed payments 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, interest may be payable on disputed amounts. Specifically, if a franchisee disputes a payment in good faith, interest is only payable after the dispute is resolved. The interest accrues on the sums found or agreed to be due, calculated from the original due date until the payment is made.
This means that if a Bevaris Alliance franchisee has a legitimate reason to dispute a payment, they won't be charged interest on that amount while the dispute is ongoing. However, if the dispute is resolved in favor of Bevaris Alliance, the franchisee will then be responsible for paying interest on the overdue amount, calculated retroactively from the initial due date. The interest rate is set at 10% per annum or the maximum percentage allowed by law, whichever is greater.
This clause protects franchisees from being penalized with interest on amounts they genuinely dispute, but it also ensures that Bevaris Alliance receives fair compensation if the dispute is ultimately resolved in their favor. Franchisees should ensure they have a clear and valid basis for disputing any payment to avoid potential interest charges. It is important to note that the interest is only payable on sums found or agreed to be due after the dispute is resolved.