For a Carls Jr. franchise, what is the maximum interest rate charged on late payments, and how is it calculated?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3.4 Interest. If any payments by Franchisee due to CKR are not received by CKR by the due date, Franchisee, in addition to paying the amount owed, shall pay CKR interest on the amount owed from the date due until paid at the maximum rate permitted for indebtedness of this nature in the state in which the Franchised Restaurants are located or 18% per annum calculated on a daily basis, whichever is less.
Source: Item 23 — RECEIPTS (FDD pages 76–364)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, if a franchisee fails to make payments to CKR (Carls Jr. Restaurants LLC) by the due date, they will incur interest charges on the outstanding amount.
The interest rate will be the lesser of two options: the maximum rate permitted for indebtedness in the state where the franchised restaurant is located, or 18% per annum. This interest is calculated on a daily basis from the date the payment was originally due until it is paid in full.
This late payment interest charge applies to any payments due to CKR, such as license fees, taxes CKR pays on behalf of the franchisee, or any other amounts owed under the franchise agreement. Franchisees should be aware of these terms to avoid incurring additional costs due to late payments. It is important to note that the interest rate could vary depending on state laws regarding maximum permissible interest rates.