What is the late fee charged by Carbones Pizzeria per month on overdue amounts?
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 franchisee will incur a late fee of 1.5% per month on any overdue amounts owed to the company. This late fee is calculated from the date the payment was originally due. However, the FDD specifies that the late fee will not exceed the highest rate of interest allowed by law.
This means that if a Carbones Pizzeria franchisee fails to make timely payments for royalties, advertising fees, or any other amounts owed to the franchisor, they will be charged this late fee. It is important for franchisees to manage their finances carefully and ensure timely payments to avoid these additional costs. The franchisor has the right to demand this fee from the franchisee.
Late fees are a common practice in franchising to encourage timely payments and compensate the franchisor for the administrative costs and potential financial losses associated with overdue accounts. Franchisees should be aware of the due dates for all fees and ensure they have sufficient funds available to cover these payments. Paying close attention to the payment schedule outlined in the franchise agreement can help franchisees avoid incurring late fees and maintain a positive financial relationship with Carbones Pizzeria.