What is the maximum interest rate Body20 can charge on delinquent fees?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
If any payment due to us is not received in full by the due date, you agree to pay us daily interest on the amount owed, calculated from the due date until paid, at the rate of 18% per annum (or the maximum rate permitted by law, if less than 18%).
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 franchise agreement specifies an interest rate of 18% per annum on overdue payments. However, this is subject to a legal maximum. If the maximum rate permitted by law is less than 18%, then that lower rate will apply. For example, the FDD notes that the highest interest rate allowed under California law is 10% annually. Therefore, if a Body20 franchise is located in California, the maximum interest rate Body20 could charge on delinquent fees would be 10%.
This means that a prospective Body20 franchisee needs to be aware of the specific laws in their state regarding maximum interest rates. If their state has a usury law or other regulation that sets a maximum rate lower than 18%, that lower rate will supersede the rate specified in the franchise agreement. It is the franchisee's responsibility to understand and comply with these local regulations.
This clause protects franchisees from potentially excessive interest charges on late payments, ensuring compliance with local laws. However, franchisees should still aim to make all payments on time to avoid incurring any interest or late fees, as these can add to the overall cost of operating the Body20 franchise.