What is the annual interest rate charged on unpaid amounts owed to Bombs Away Franchising?
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, they will incur a $100 late fee. Additionally, Bombs Away will charge interest on the unpaid amount at a rate of 18% per year. However, if this rate exceeds the maximum allowed by law, the interest rate will be the highest rate legally permissible.
This means that prospective Bombs Away franchisees need to be aware of the importance of making timely payments to avoid these additional charges. The 18% annual interest rate is a significant penalty and could substantially increase the amount owed if payments are delayed. Franchisees should ensure they have sufficient financial resources and systems in place to manage payments effectively.
It's also important to note that Bombs Away has the right to apply any payment received from the franchisee to any obligation in any order they determine, regardless of any designation by the franchisee. This gives Bombs Away considerable control over how payments are allocated, potentially impacting which fees or debts are cleared first. Franchisees should maintain clear records of all payments and obligations to reconcile their accounts with Bombs Away regularly.