What determines the maximum interest rate that Carbones Pizzeria can charge on unpaid Advertising Fees?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
- e. Advertising Fees not paid by Franchisee as required herein shall bear interest at the rate of one and a half percent (1.5%) per month, provided, however, that in no event shall the rate of interest payable by Franchisee on any unpaid balance under this Agreement exceed the maximum legal rate under applicable law.
Source: Item 23 — RECEIPTS (FDD pages 30–116)
What This Means (2025 FDD)
According to the 2025 Carbones Pizzeria Franchise Disclosure Document, the maximum interest rate that Carbones Pizzeria can charge on unpaid Advertising Fees is determined by applicable state law. While the franchise agreement states that unpaid Advertising Fees will accrue interest at a rate of 1.5% per month, this is subject to a legal maximum.
Specifically, if any state law sets a maximum legal interest rate that is lower than the 1.5% per month specified in the agreement, then the lower rate mandated by state law will apply. This ensures that Carbones Pizzeria remains compliant with usury laws, which are designed to protect borrowers from excessively high interest rates.
For a prospective Carbones Pizzeria franchisee, this means that the actual interest rate charged on overdue Advertising Fees could vary depending on the location of their franchise. It is important to be aware of the specific usury laws in their state to understand the potential financial implications of late payments. Franchisees should consult with legal and financial professionals to ensure full compliance with all applicable regulations.