What is the interest rate charged on late payments to Black Bear Diner?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee(1) | Amount | Due Date |
|---|---|---|
| Late Payment Interest | 18% of the overdue amount, calculated daily, or the maximum rate permitted by law, whichever is less | After due date |
Source: Item 6 — OTHER FEES (FDD pages 14–18)
What This Means (2025 FDD)
According to Black Bear Diner's 2025 Franchise Disclosure Document, franchisees will incur interest on late payments. The interest charged is 18% of the overdue amount, calculated daily. However, the FDD specifies that if the maximum interest rate permitted by law is less than 18%, the legal maximum will be applied instead.
This means that a Black Bear Diner franchisee could face a significant financial penalty for failing to make timely payments. The daily calculation of interest means the charges can add up quickly. Franchisees should be aware of this policy and ensure they have systems in place to manage payments effectively.
It is fairly common for franchisors to charge interest on overdue amounts as a way to encourage timely payments and to compensate for the administrative costs and potential cash flow issues caused by late payments. The specific interest rate can vary, but 18% is within the typical range, although the application of the legal maximum provides some protection to the franchisee.