What is the APR interest rate charged on underpaid fees to Bhc, and what is the exception?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
If an examination or audit discloses any underpayment of any fee, you 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 Master Franchised BHC Restaurant is located are limited by law to a lower APR, in which case that lower APR will apply).
Source: Item 6 — Other Fees (FDD pages 12–18)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, if an audit reveals any underpayment of fees, the franchisee must pay the deficient amount. Bhc charges interest on the underpaid amount calculated daily from the due date until it is paid. The standard annual percentage rate (APR) for this interest is 18%.
However, there is an exception to this APR. If the interest rates on delinquent payments in the state where the franchisee's Bhc restaurant is located are legally limited to a lower APR, then that lower APR will be applied instead of the 18%. This means Bhc will adhere to state laws that cap interest rates on late payments, ensuring compliance.
This policy ensures that Bhc is compensated for underpaid fees while also complying with local regulations regarding interest rates. For a prospective franchisee, it's important to be aware of both the standard interest rate and the potential for it to be lower depending on the specific location of their Bhc restaurant. Franchisees should also maintain accurate financial records to avoid underpayments and the resulting interest charges.