What is the 'late fee' defined as in the Bombs Away franchise agreement?

According to Bombs Away's 2024 Franchise Disclosure Document, if a franchisee fails to make a payment on time, they will incur a $100 late fee. In addition to the late fee, Bombs Away will charge interest on the unpaid amount at a rate of 18% per year. However, if this interest rate exceeds the maximum rate allowed by law, the interest will be charged at 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 $100 late fee is a fixed amount, but the interest on the unpaid balance can accumulate, potentially increasing the overall cost of the late payment.

Franchisees should also be aware of the specific due dates for all payments to Bombs Away to ensure compliance and avoid triggering these late payment penalties. It is common practice in franchising for franchisors to charge late fees and interest on overdue amounts to encourage timely payments and cover the administrative costs associated with collecting late payments.

Bombs Away franchisees should maintain organized financial records and set up reminders for payment deadlines to minimize the risk of incurring late fees and interest charges. Understanding these financial obligations is crucial for managing the business effectively and maintaining a positive relationship with Bombs Away.