What is the definition of 'Maximum Rate' in the context of usury laws for Caring Senior Service?
Caring_Senior_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
Regardless of any provisions contained in this Note, the Payee shall never be deemed to have contracted for or be entitled to receive, collect, or apply as interest on the Note, any amount in excess of the Maximum Rate, and, in the event Payee ever receives, collects, or applies as interest any such excess, such amount which would be excessive interest shall be applied to the reduction of the unpaid principal balance of this Note, and, if the principal balance of this Note is paid in full, then any remaining excess shall be paid to Maker.
Source: Item 23 — RECEIPTS (FDD pages 53–204)
What This Means (2025 FDD)
According to Caring Senior Service's 2025 Franchise Disclosure Document, the 'Maximum Rate' is addressed within the context of usury laws. The document states that Caring Senior Service shall never be deemed to have contracted for or be entitled to receive, collect, or apply as interest on the Note, any amount exceeding the Maximum Rate.
In practical terms, this means that Caring Senior Service is legally bound to not charge interest rates that surpass the maximum allowable rate as defined by applicable usury laws. If, for any reason, the interest collected exceeds this legal limit, the excess amount will be applied to reduce the unpaid principal balance of the note.
Furthermore, if the principal balance is fully paid and there remains an excess amount from the overcharged interest, Caring Senior Service is obligated to pay that remaining excess back. This provision protects the maker from being charged excessive interest and ensures compliance with usury laws.