What is the amount of the one-time late fee for amounts due to Chem Dry?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
o the Franchise Agreement associated with this Business Note in full within six (6) months of the date of this Business Note, CDI will discount the total due for the Initial License Fee by ten percent (10%). No prepayments of this Business Note shall affect the obligation of Borrower to make the
payments of installments of the principal and interest required by the first paragraph hereof until this Business Note shall have been paid in full. All amounts due by Borrower to CDI shall be subject to a one-time late fee of $100.00 and bear interest after their due date at t
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, if a franchisee fails to pay amounts owed to Chem Dry on time, they will be subject to a one-time late fee of $100.00. This fee is in addition to accruing interest on the past due amount.
Specifically, the FDD states that all amounts due by the franchisee to Chem Dry are subject to this late fee. This implies that the fee applies to various types of payments, such as franchise fees, advertising fees, or other charges outlined in the franchise agreement. The late fee is a one-time charge, meaning it is assessed once for each instance of late payment, regardless of how long the payment remains overdue.
In addition to the one-time late fee, the overdue amount will also accrue interest. The interest rate is the highest applicable legal rate for open account business credit in the franchisee's state of domicile, but it will not exceed 1.5% per month. After the Business Note's maturity, whether through acceleration or otherwise, Chem Dry has the right to collect all payments due, and interest will accrue on the principal balance at a rate of 18% per annum. Furthermore, a $40.00 fee will be assessed for each installment returned unpaid due to non-sufficient funds or a closed account.
Prospective franchisees should be aware of these late payment penalties and ensure they have a system in place to make timely payments to Chem Dry. Understanding these financial obligations is crucial for managing cash flow and avoiding unnecessary expenses. Franchisees should also inquire about any potential grace periods or alternative payment arrangements that may be available in extenuating circumstances.