What is the interest charge for late monthly payments to Chem Dry?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
payments will be automatically deducted from your bank account. Monthly payments not received by
the due date are subject to interest charge in the amount of 1.5% per month, or the highest rate allowed by applicable law, whichever is less.
All Business Note payments are due on or before the tenth day of each month. The Business Note must be issued and signed by the franchisee and its owners, officers, shareholders, or members as personal guarantors, if an entity. There is no prepayment penalty. The Business Note includes a waiver of defenses (or similar provisions).
If you do not make Business Note payments when due, CDI may accelerate the Note and demand immediate payment of the full outstanding principal amount plus accrued interest. CDI may also terminate the Franchise Agreement under Section 15 of the Franchise Agreement. A charge of $50.00 will be assessed for any installments returned unpaid. In the event of collection proceedings, CDI reserves the right to pursue costs associated with the collections, including court costs and attorney fees in accordance with the Business Note and Section 17 of the Franchise Agreement.
Source: Item 10 — FINANCING (FDD pages 35–37)
What This Means (2024 FDD)
According to Chem-Dry's 2024 Franchise Disclosure Document, if a franchisee's monthly payments are not received by the due date, Chem-Dry will impose an interest charge. This interest charge will be 1.5% per month, or the highest rate allowed by applicable law, whichever is less. All Business Note payments are due on or before the tenth day of each month. Chem-Dry requires an automatic debit program for the payment of all fees and Business Note payments.
This means that if a Chem-Dry franchisee is late on a monthly payment, they will be charged interest on the outstanding balance. The specific interest rate will depend on both the 1.5% monthly rate and any legal restrictions on interest rates in the franchisee's jurisdiction; the lower of the two rates will apply. Franchisees should ensure they understand the due dates for their payments and maintain sufficient funds in their account to avoid these late payment interest charges.
Additionally, a $50 fee will be assessed for any installments returned unpaid. If the franchisee fails to make Business Note payments when due, Chem-Dry has the right to accelerate the note and demand immediate payment of the full outstanding principal amount, including any accrued interest. Chem-Dry may also terminate the Franchise Agreement under Section 15 of the Franchise Agreement. In the event of collection proceedings, Chem-Dry reserves the right to pursue costs associated with the collections, including court costs and attorney fees in accordance with the Business Note and Section 17 of the Franchise Agreement.