What interest rate is applied to late royalty payments for a Carbones Pizzeria franchise?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
e. Any Royalty payment not remitted on time shall bear interest at the rate of one and a half percent (1.5%) per month, until such time as it is received by Franchisor; provided, however, that if any applicable state law limits the maximum legal interest rate to a lower amount, then in that event the lower interest rate will be applicable.
Source: Item 23 — RECEIPTS (FDD pages 30–116)
What This Means (2025 FDD)
According to the 2025 Carbones Pizzeria Franchise Disclosure Document, any royalty payment not remitted on time will incur an interest rate of 1.5% per month until the payment is received by Carbones Pizzeria.
However, there is a caveat: if any applicable state law limits the maximum legal interest rate to a lower amount, then the lower interest rate will be applied instead. This means a franchisee's late payment interest rate could be less than 1.5% per month depending on the state where the franchise is located.
This policy incentivizes franchisees to make royalty payments on time to avoid accruing interest charges. Prospective franchisees should be aware of their state's laws regarding maximum legal interest rates to understand the potential charges for late royalty payments.