What is the maximum interest rate that Carbones Pizzeria can charge on late payments?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
Accounts receivable for royalty fees from franchisees are due on or before the first day of each week for the sales during the preceding week and accounts receivable for advertising fee royalties from franchisees are due on or before Tuesday of each week for the sales during the preceding week. All receivables not received on time receive additional scrutiny from management and may be charged interest at rates up to 12% annually.
Source: Item 22 — CONTRACTS (FDD page 30)
What This Means (2025 FDD)
According to the 2025 Carbones Pizzeria Franchise Disclosure Document, the company may charge interest on late payments. Specifically, accounts receivable for royalty fees from franchisees are due on or before the first day of each week for the sales during the preceding week. Accounts receivable for advertising fee royalties from franchisees are due on or before Tuesday of each week for the sales during the preceding week.
If these payments are not received on time, Carbones Pizzeria's management will scrutinize them and may charge interest. The maximum annual interest rate that Carbones Pizzeria can charge on these late payments is 12%.
This means that if a franchisee is late on their royalty or advertising fee payments, they could be charged up to 12% annual interest on the overdue amount. Franchisees should ensure timely payments to avoid incurring these interest charges.