What is the maximum interest rate Care Plus Medical Ucc can charge on late payments?
Care_Plus_Medical_Ucc Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Pass-through of | Varies | We have the right to require franchisees to | |
| costs, plus | use third-party vendors and suppliers that | ||
| reasonable | we designate. Examples can include | ||
| administrative | computer support vendors, mystery | ||
| charge. Currently, | shopping, and customer feedback systems. | ||
| none. | The vendors and suppliers may bill | ||
| franchisees directly, or we have the right | |||
| to collect payment for these vendors | |||
| together with a reasonable markup or | |||
| charge for administering the payment | |||
| program. | |||
| We require you to use certain software as | |||
| described in Item 11. You pay | |||
| subscription fees directly to the software | |||
| supplier, and not to us. | |||
| We may charge you $500 if your business | |||
| is not in compliance with our system | |||
| specifications or the franchise agreement | |||
| and you fail to correct the non-compliance | |||
| after 30 days’ notice. Thereafter, we may | |||
| charge you $250 per week until you | |||
| correct such non-compliance. | |||
| Amount that we | If we pay any amount that you owe or are | ||
| spend on your | required to pay to a third party, you must | ||
| behalf, plus 10% | reimburse us. | ||
| $100 plus interest on | We may charge a late fee if you fail to | ||
| the unpaid amount at | make a required payment when due. | ||
| a rate equal to 18% | |||
| per year (or, if such | |||
| payment exceeds the | |||
| maximum allowed | |||
| by law, then interest | |||
| at the highest rate | |||
| allowed by law) |
Source: Item 6 — OTHER FEES (FDD pages 12–16)
What This Means (2024 FDD)
According to Care Plus Medical Ucc's 2024 Franchise Disclosure Document, if a franchisee fails to make a required payment when it is due, Care Plus Medical Ucc may charge a late fee. In addition to a $100 late fee, Care Plus Medical Ucc can charge interest on the unpaid amount.
The interest rate is set at 18% per year. However, the FDD stipulates that if this rate exceeds the maximum interest rate allowed by law, Care Plus Medical Ucc will instead charge the highest interest rate legally permitted. This ensures that Care Plus Medical Ucc remains compliant with applicable usury laws while still being able to recoup costs associated with late payments.
This policy is fairly standard in franchising, as it allows the franchisor to protect its revenue stream and encourage timely payments from franchisees. Prospective Care Plus Medical Ucc franchisees should be aware of this late fee and interest policy and ensure they have sufficient financial resources to meet their payment obligations to avoid incurring these additional charges.