What is the interest rate a Carls Jr. franchisee will be charged on late payments?
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 (Carl Karcher Enterprises) by the due date, they will incur interest charges on the outstanding amount.
The interest rate applied to late payments will be the lesser of two options: either the maximum interest rate permitted for this type of debt under the laws of the state where the franchised restaurant is located, or 18% per annum. This interest is calculated on a daily basis from the original due date until the payment is made.
This late payment interest charge is a fairly standard practice in franchising. It incentivizes franchisees to make timely payments and compensates the franchisor for the time value of money and the administrative costs associated with collecting overdue payments. Franchisees should be aware of this provision and factor it into their financial planning to avoid incurring these charges.