What are the two options for calculating the Late Fee for a Bft franchise, and which one applies?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Music Licensing Fee 4 | Amounts charged by the providers and/or applicable performing rights organizations (PROs) for such music licensing | As invoiced or otherwise agreed | We may require that the music licensing fee (the “Music Licensing Fee”) amount be paid directly to performing rights organizations (PROs) or to our then-current Approved Supplier (which may be us or our affiliate) that handles and manages these licenses for System franchisees. |
| Insurance Policies 5 | Amount of unpaid premium | As agreed | Payable only if you fail to maintain required insurance coverage and we elect to obtain coverage for you. |
| Audit Fees 6 | Costs incurred by us in connection with conducting audit Currently, we estimate that such costs will typically be between $500 to $2,500 (plus costs of any travel) | Within 15 calendar days after receipt of audit report | Payable only if (a) an audit or review shows an understatement of Gross Sales for the audited period of 2% or more, or (b) the audit or review is being conducted in response to your failure to timely submit any reports required by your Franchise Agreement. |
| Mystery Shopper and Other Quality Control Programs | If charged, up to $500 per year | Within 30 days of demand | Payable only if we establish a mystery shopper program or other quality control mechanism or program, in which case we may require a franchisee to contribute up to $500/year to help defray the costs of such programs that are designed to preserve the goodwill and brand image. These fees are not currently imposed. |
| Late Fees | The lesser of (a) the highest applicable legal rate for open account business credit, or (b) 1.5% per month | Upon demand | Applies to all amounts not paid when due, until paid in full. We may also require you to pay an administrative fee of $50 for each late payment or late report. |
Source: Item 6 — OTHER FEES (FDD pages 21–26)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, a franchisee will incur late fees on all amounts not paid when due until they are paid in full. The late fee is calculated as the lesser of two options: the highest applicable legal rate for open account business credit, or 1.5% per month.
In addition to the late fee, Bft may also require the franchisee to pay an administrative fee of $50 for each late payment or late report. This administrative fee is separate from the interest-based late fee and adds to the financial burden of late payments.
It is important for prospective Bft franchisees to understand these late fee policies to avoid incurring additional costs. Franchisees should ensure timely payments to avoid both the interest-based late fee and the administrative fee. Understanding the due dates for all payments and reports is crucial for maintaining good standing with Bft and avoiding these penalties.