What is the interest rate applied to overdue 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 FDD, Bevaris Alliance franchisees may be subject to interest on overdue payments. Specifically, if a franchisee fails to make a payment by the due date, they will be required to pay interest on the overdue amount. The interest rate is set at 10% per annum, or the maximum percentage of interest allowed by law, whichever is greater.
This interest accrues daily from the original due date until the payment is made, regardless of whether this occurs before or after a legal judgment. The franchisee is responsible for paying both the overdue amount and the accrued interest.
However, if a payment is disputed in good faith, interest is only payable after the dispute is resolved. In such cases, interest accrues from the original due date only on the sums found or agreed to be due. This clause protects franchisees from unfairly accruing interest on amounts genuinely under dispute, but it's important to note that once the dispute is settled, interest applies retroactively from the initial due date.