What is the monthly interest rate charged by Caring Senior Service on late payments?
Caring_Senior_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
To encourage prompt and timely payment of Royalty Fees, Marketing Fees and other fees payable hereunder, and to cover the costs and expenses involved in handling and processing any payments not received by their due dates, you shall also pay, upon demand, for each day that required payments are late, interest in an amount equal to the lesser of: (i) one and one-half percent (1.5%) per month; or (ii) the highest rate permitted by law. Such charges shall accrue from the date payment was due until the date payment is actually received by us. Notwithstanding the foregoing, each failure to pay Royalty Fees, Marketing Fees, or other payments payable to us when due will be a material breach of this Agreement and shall give us, in addition to all other rights and remedies hereunder, the right to terminate this Agreement.
5.6 Application of Payments
We shall have sole discretion to apply any payments received from you to any past due indebtedness of yours for Royalty Fees, Marketing Fees, purchases made from us or our affiliates, late payment charges or any other indebtedness of yours to us or our affiliates.
Source: Item 23 — RECEIPTS (FDD pages 53–204)
What This Means (2025 FDD)
According to Caring Senior Service's 2025 Franchise Disclosure Document, franchisees may be charged interest on late payments. To encourage timely payments of Royalty Fees, Marketing Fees and other fees, Caring Senior Service will charge interest for each day payments are late. The interest rate is the lesser of 1.5% per month or the highest rate permitted by law. This charge accrues from the date the payment was due until Caring Senior Service actually receives the payment.
It's important to note that failure to pay fees on time constitutes a material breach of the Franchise Agreement, which could lead to termination of the agreement. Caring Senior Service has the discretion to apply any payments received from the franchisee to any past due debts, including Royalty Fees, Marketing Fees, purchases from Caring Senior Service or its affiliates, late payment charges, or any other debts owed to Caring Senior Service or its affiliates.
This policy is fairly standard in franchising, as franchisors rely on consistent and timely payments from franchisees to maintain their own financial stability and provide ongoing support. Franchisees should ensure they understand the payment terms and due dates outlined in the Franchise Agreement to avoid incurring late fees and potential breach of contract.
Prospective franchisees should carefully consider their ability to manage their finances and make timely payments to Caring Senior Service. Understanding these financial obligations is crucial for maintaining a healthy franchisor-franchisee relationship and avoiding potential legal and financial repercussions.