What is the APR interest rate charged by Bhc on underpaid fees?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
If an examination or audit discloses any underpayment of any fee, Franchisee must promptly pay the deficient amount plus interest calculated daily from the due date until paid at an APR of 18% (unless interest rates on delinquent payments in the state in which Franchisee's Franchised BHC Restaurant is located are limited by law to a lower APR, in which case that lower APR will apply).
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, if an audit reveals that a franchisee has underpaid any fees, Bhc will charge interest on the deficient amount. This interest is calculated daily from the date the payment was originally due until it is paid in full. The APR (Annual Percentage Rate) for this interest is 18%.
However, the FDD stipulates an exception: if the state where the BHC restaurant is located has laws that limit interest rates on delinquent payments to a rate lower than 18%, that lower APR will be applied instead. This means a franchisee's interest rate could vary based on their location's regulations.
This policy ensures that Bhc is compensated for the time value of money and any administrative costs associated with collecting underpaid fees. It also incentivizes franchisees to ensure accurate and timely payments. Franchisees should be aware of their state's laws regarding interest rates to understand the potential charges for underpayment.