What is the condition for Carbones Pizzeria to impose a late fee?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
ITEM 6. OTHER FEES
| (Column 1) Type of Fee1 | (Column 2) Amount | (Column 3) Due Date | (Column 4) Remarks |
|---|---|---|---|
| Royalty | 4% of Gross Sales on the initial $1,000,000 in Gross Sales per year, 3% of Gross Sales on the next $1,000,000 per year and 2% of Gross Sales on any additional Gross Sales over $2,000,000 per year. | Payable monthly on 10th day following the month covered | Gross Sales includes all revenues from the operation of the Restaurant including any delivery or off premises sales. Gross Sales do not include sales tax or use tax, non-food vending machine sales, revenue from alcohol sales, and discounts. |
| Advertising | 1% of total Gross Sales up to $2,000,000 per year. No additional fee for Gross Sales over $2,000,000 in that year. | Payable monthly on 10th day following the month covered | |
| Late Fee | 1.5% per month from date due, not to exceed the highest rate of interest allowed by law. | Upon demand | This fee is imposed by us if you do not pay amounts you owe |
Source: Item 6 — OTHER FEES (FDD pages 8–10)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, a late fee of 1.5% per month can be imposed if a franchisee does not pay amounts owed to Carbones Pizzeria in a timely fashion. This late fee is calculated from the date the payment was originally due and will not exceed the highest rate of interest allowed by law. Carbones Pizzeria will demand this fee from the franchisee.
This means that if a Carbones Pizzeria franchisee is late on any payments owed to the company, they will incur a monthly late fee of 1.5% on the outstanding balance. It is important for prospective franchisees to understand that 'amounts you owe us' likely covers a range of payments, such as royalties or advertising fees. Franchisees should ensure they have sufficient cash flow to cover these fees promptly to avoid these additional charges.
Late fees are a common practice in franchising to encourage timely payments. Franchisees should be aware of all due dates for fees and ensure payments are made on time to avoid these charges. It is also important to note that the late fee is 'per month,' meaning it will compound monthly on any unpaid balance, potentially increasing the amount owed significantly over time. Franchisees should also be aware of the maximum interest rate allowed by law in their jurisdiction, as this will cap the potential late fee amount.