How must late fees and interest be paid by a C12 Group franchisee?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
as they may be revised from time to time in Franchisor's sole discretion. Currently, these obligations of Franchisee include the
following:
- a. Franchisee shall submit a monthly Area Chair Activity and Payment Report via the reporting system to Franchisor by the fifth (5th) business day of each month for the preceding month's activity. Franchisee shall pay Franchisor a late fee of $100 each time this report is late. Any unpaid Royalty Fees past-due greater than thirty (30) days will be subject to a monthly compounded interest rate of 1.5% or the maximum interest rate allowed by law. Late fees and interest shall be paid in conjunction with Franchisee's payment of Royalty Fees. In addition, if Franchisee requires a change to a monthly Area Chair Activity and Payment Report (not due to Franchisor's system error) after the fifth (5th) day of the following month, Franchisee must pay Franchisor a $99 fee to correct such error(s).
- b. Franchisee shall pay Franchisor all fees due under this Agreement via ACH or check (or credit card with Franchisee paying the applicable transaction and processing fees), which must be received by Franchisor by the fifth
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, late fees and interest are to be paid in conjunction with the franchisee's payment of Royalty Fees. Specifically, if a C12 Group franchisee submits their monthly Area Chair Activity and Payment Report late, they will incur a $100 late fee. Furthermore, any unpaid Royalty Fees that are past due for more than thirty days will be subject to a monthly compounded interest rate of 1.5%, or the maximum interest rate allowed by law, if lower.
This means that C12 Group franchisees must ensure timely submission of their monthly reports and prompt payment of Royalty Fees to avoid these additional charges. The requirement to pay late fees and interest alongside Royalty Fees emphasizes the importance of maintaining good financial standing with C12 Group. Franchisees should factor these potential costs into their financial planning and ensure they have systems in place to manage reporting and payments effectively.
C12 Group also specifies that all fees due under the agreement must be paid via ACH or check. Credit card payments are also accepted, but the franchisee is responsible for covering any applicable transaction and processing fees associated with credit card payments. The franchisor retains the right to modify the due dates and methods of payment for all payments due under the agreement, so franchisees must stay informed of any changes to payment policies.
Overall, these policies are fairly standard in franchising, as franchisors rely on timely payments from franchisees to maintain their own financial stability and provide ongoing support. Franchisees should carefully review the payment terms in the Franchise Agreement and budget accordingly to avoid late fees and interest charges.