Is the interest rate on overdue payments for Bevaris Alliance fixed, or is there a condition?
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, the interest rate on overdue payments is not strictly fixed. It is set at 10% per annum, or the maximum percentage of interest allowed by law, whichever is greater. This means that the actual interest rate charged could vary depending on the prevailing legal limits in the franchisee's jurisdiction.
This condition protects Bevaris Alliance by ensuring they can charge the highest legally permissible interest rate on overdue amounts. It also means that a franchisee's interest rate could fluctuate if the legal maximum changes in their area. The interest accrues daily from the due date until the payment is made, regardless of whether it's before or after a judgment.
However, the FDD also states that if a payment is disputed in good faith, interest is only payable after the dispute is resolved, and only on the sums found to be due. This provides some protection for franchisees who have legitimate disagreements over payment amounts. It's important for prospective franchisees to understand both the base interest rate and the conditions under which it may be applied or waived.