What is the maximum interest rate for the late fee charged by Carbones Pizzeria?
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 is applied to overdue payments, calculated from the date the payment was originally due. However, the document specifies that this late fee will not exceed the highest rate of interest allowed by law. This fee is imposed if a franchisee fails to make payments on time.
For a prospective Carbones Pizzeria franchisee, this means that if you are late on payments owed to the company, you will be charged a late fee. The fee is 1.5% per month, but it's important to note that this rate is capped by the maximum interest rate legally permissible in your jurisdiction. It is important to understand what the maximum interest rate allowed by law is in your state.
This type of late fee is a fairly standard practice in franchising and other business agreements. The purpose is to encourage timely payments and compensate the franchisor for the inconvenience and potential financial impact of delayed funds. Franchisees should ensure they understand the payment terms and due dates outlined in the Franchise Agreement to avoid incurring these late fees. Carbones Pizzeria has the right to collect these fees by preauthorized check draft, pre-authorized credit card charge, or electronic funds transfer/direct debit, and the franchisee must sign all documents required to accomplish this payment method.