What is the interest rate charged by Brueggers Bagels on unpaid amounts, and how is it calculated?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Date Due | Remarks | | (Note 1) | | | | |----------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | Interest and Late Fees | $100 per week plus interest on the unpaid amount at the rate of one and one-half percent (1.5%) per month or the maximum rate permitted by state law, whichever is less ("Default Rate") | Upon demand or with payment of overdue amount | We can charge a late fee to compensate us for our administrative costs incurred in enforcing your obligation to pay us. We calculate interest from the date the payment was due until paid in full. Payments will be applied to any late fee first, then interest due, then the principal amount due.
Source: Item 6 — OTHER FEES (FDD pages 13–18)
What This Means (2025 FDD)
According to Brueggers Bagels's 2025 Franchise Disclosure Document, if a franchisee fails to pay amounts owed, Brueggers Bagels charges interest on the unpaid amount. The interest rate is the lesser of one and one-half percent (1.5%) per month or the maximum rate permitted by state law, referred to as the "Default Rate." In addition to interest, Brueggers Bagels also charges a late fee of $100 per week.
Interest is calculated from the date the payment was originally due until it is paid in full. When a franchisee makes a payment, Brueggers Bagels applies the payment first to any outstanding late fees, then to the accrued interest, and finally to the principal amount due.
This policy is fairly standard in franchising, as franchisors need to ensure timely payments from franchisees to maintain their own financial stability. Franchisees should be aware of these terms and ensure they have sufficient capital and cash flow management to avoid incurring these additional charges. It is important to note that the interest rate could be lower if state law mandates a lower maximum rate.