When is the late fee due to Bombs Away?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| $100 plus interest on | On demand | We may charge a late fee if you fail to | |
| the unpaid amount at | make a required payment when due. | ||
| 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) | |||
| $30 (or, if such |
Source: Item 6 — OTHER FEES (FDD pages 9–13)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, a late fee may be charged if a franchisee fails to make a required payment when it is due. The late fee, along with interest on the unpaid amount, is due to Bombs Away on demand. The interest rate is 18% per year, but if that rate exceeds the maximum allowed by law, the interest will be charged at the highest legally permissible rate.
In practical terms, this means that if a Bombs Away franchisee misses a payment deadline, they will immediately incur a late fee. The amount of the late fee is $30, but if that amount exceeds the maximum allowed by law, then the maximum allowed by law will be charged. Additionally, interest will accrue on the outstanding balance at a rate of 18% per year or the maximum legal rate, compounding the financial burden.
Franchisees should be diligent in making all payments on time to avoid these charges. It's also important to understand what constitutes a "required payment" under the franchise agreement to prevent unintentional late fees. Bombs Away may also charge their actual costs if they incur costs attempting to collect amounts owed to them.
It is fairly standard practice in franchising to charge late fees and interest on overdue amounts, as this incentivizes timely payments and compensates the franchisor for the administrative costs and potential cash flow disruptions caused by late payments.