What is the annual interest rate charged by Bombs Away Franchising on unpaid amounts?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee acknowledges that Bombs Away Franchising has the right to remotely access Franchisee's point-of-sale system to calculate Gross Sales.
- (c) Late Fees and Interest. If Franchisee does not make a payment on time, Franchisee shall pay a $100 "late fee" plus interest on the unpaid amount at a rate equal to 18% per year (or, if such payment exceeds the maximum allowed by law, then interest at the highest rate allowed by law).
- (d) Insufficient Funds.
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, if a franchisee fails to make payments on time, Bombs Away Franchising will charge interest on the unpaid amount. The annual interest rate is 18%, but if this rate exceeds the maximum allowed by law, the interest rate will be the highest rate legally permitted. In addition to interest, Bombs Away also charges a $100 late fee for overdue payments.
This means that prospective Bombs Away franchisees need to be aware of the importance of making timely payments to avoid incurring these additional charges. The 18% interest rate is a significant cost, and the $100 late fee adds to the financial burden of late payments. Franchisees should ensure they have sufficient cash flow management in place to meet their financial obligations to Bombs Away Franchising.
It's also important to note that Bombs Away Franchising has the right to apply any payment received from the franchisee to any obligation in any order it determines, regardless of any designation by the franchisee. This gives Bombs Away flexibility in how it applies payments, which could impact the franchisee's financial standing with the company. Franchisees should maintain clear records of their payments and outstanding obligations to ensure accurate accounting and avoid potential disputes.