Under what circumstances does Card My Yard charge interest or late fees?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
| Marketing | Currently $0. If | If implemented, we will | businesses that are located in your Cooperative territory, such company owned Card My Yard businesses will NOT have voting power to increase your required Cooperative contributions. All or a portion of your contributions to a Cooperative may be used to establish and/or maintain a website(s) focused on promoting the Card My Yard Concept in and around your market area. See Note 2 for the definition of Gross |
|---|---|---|---|
| Fund | implemented, an amount equal to the greater of: (a) one-half of one percent (0.5%) of the Card My Yard business' monthly Gross Sales or (b) $25 per month in the first 12 months of your agreement; $40 per month in months 13 through 24; and $65 per month in each 12- month period thereafter. | withhold these funds in the same manner as the royalty payments described above in this Item 6. | Sales. The Marketing Fund contribution is in addition to the local advertising requirement. We may increase the required contribution amount on not less than 30 days' written notice to you (up to a maximum of 2% of Gross Sales, subject to the monthly minimum payments). We may, in our sole discretion, change the frequency of the Marketing Fund Contributions (e.g. change to monthly payments) upon written notice to you. |
| Interest and Late Fees | Interest of 18% per annum or the maximum rate allowed by applicable law, or, at our option, $100 for each failure to timely pay an amount owed under the Franchise Agreement | On demand | We may charge interest or a late fee for any delinquent amounts due under th |
Source: Item 6 — OTHER FEES (FDD pages 15–23)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, interest or late fees may be charged for any delinquent amounts due under the Franchise Agreement. Specifically, Card My Yard may charge interest at a rate of 18% per annum, or the maximum rate allowed by applicable law. Alternatively, at their option, Card My Yard may charge a flat fee of $100 for each failure to timely pay an amount owed under the Franchise Agreement.
This means that if a Card My Yard franchisee fails to make payments on time, they could face significant financial penalties. The interest rate of 18% per annum is substantially higher than typical bank lending rates, and the $100 late fee could quickly add up if multiple payments are missed. It is important for prospective franchisees to understand these potential costs and ensure they have a solid financial plan in place to avoid late payments.
Franchisees should be aware that these charges are 'on demand,' meaning Card My Yard can impose them as soon as a payment is late. This differs from some franchise systems that may offer a grace period before assessing late fees or interest. The FDD does not specify how Card My Yard determines whether to charge interest or the flat $100 fee, so franchisees should clarify this with the franchisor during their due diligence.
In summary, the potential for high interest rates and late fees highlights the importance of maintaining timely payments to Card My Yard. Prospective franchisees should carefully review the payment terms in the Franchise Agreement and factor these potential costs into their financial projections.