In California, what is the maximum interest rate Body20 can charge for late fees annually?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
The following is added to the "Remarks" column of the line item titled "Late Fee and Interest" in Item 6:
The highest interest rate allowed under California law is 10% annually.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to Body20's 2025 Franchise Disclosure Document, the standard interest rate for late payments is 18% per annum. However, for franchisees operating in California, the maximum interest rate Body20 can charge on late payments is capped at 10% per year, as mandated by California law. This ensures that Body20's practices comply with state regulations regarding interest rates.
This means that if a Body20 franchisee in California is late on a payment, the interest charged on the outstanding amount will not exceed 10% annually, even though the standard agreement specifies 18%. This protection is particularly relevant for franchisees in California, as it ensures they are not subject to higher interest rates that may be permissible in other states but are restricted by California law.
Prospective Body20 franchisees in California should be aware of this provision, as it provides a degree of financial protection in the event of late payments. It is also a good example of how state-specific regulations can modify the standard terms of a franchise agreement, highlighting the importance of understanding the laws in the franchisee's specific jurisdiction.