What is the late payment charge for overdue monetary obligations to Buona or its affiliates?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3.5 Late Payment Charge.
If any monetary obligations owed by Franchisee to Franchisor or to its Affiliates are more than seven (7) days overdue, Franchisee shall, in addition to any other obligations, pay to Franchisor a sum equal to one and one-half percent (1.5%) of the overdue balance per month, or the highest rate permitted by law, whichever is less, from the date said payment is due ("Late Payment Charge").
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, if a franchisee's monetary obligations to Buona or its affiliates are more than seven days overdue, Buona will charge a late payment fee. This late fee is equal to 1.5% of the overdue balance per month, or the highest rate permitted by law, whichever is less. This charge applies from the original date the payment was due.
This policy means that franchisees need to ensure timely payments to Buona to avoid incurring these additional charges. The 1.5% monthly charge can add up quickly, especially on larger overdue balances. Franchisees should be aware of this late payment charge and factor it into their financial planning to maintain a healthy relationship with the franchisor and avoid unnecessary expenses.
Buona also requires franchisees to make all payments via automated clearing house (ACH). If an ACH payment is not honored by the franchisee's bank for any reason, the franchisee is responsible for the original payment amount, plus any service charges applied by Buona and the bank, as well as Buona's then-current non-sufficient funds fee. Failure to maintain an ACH account is a material default of the agreement.