What interest rate will Chem Dry charge on overdue payments?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
due to your actions or request, amend the Agreement or when you ask us to issue written consent to various transactions or to services for which a specific fee is not imposed elsewhere in this Agreement or the System. As of the Effective Date, the Administrative Fee is $500.00 per transaction.
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- `Each discrete amount payable by FRANCHISEE to CDI or its affiliates under this Agreement shall bear interest after its due date at the lesser of one and one-half percent (1.5%) per month or the highest applicable legal rate for open account business credit in the state of FRANCHISEE's domicile. FRANCHISEE acknowledges that this Section shall not constitute CDI's agreement to accept any payment after its due date or a commitment by CDI to extend credit to, or otherwise finance the BUSINESS.
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- If CDI debits FRANCHISEE'S account for monies owed and there are insufficient funds available, CDI may charge FRANCHISEE its then-current non-sufficient funds fee ("NSF Fee").
**D.
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, there are two interest rates applicable to overdue payments. For amounts due under the Franchise Agreement, Chem Dry charges the lesser of 1.5% per month or the highest applicable legal rate for open account business credit in the franchisee's state of domicile. This applies to each discrete amount payable to Chem Dry or its affiliates. Chem Dry clarifies that this does not constitute an agreement to accept late payments or a commitment to extend credit.
Additionally, the Business Note outlines interest on overdue amounts related to the initial fees or initial license fee. Amounts due under the Business Note are subject to a one-time late fee of $100.00 and bear interest after their due date at the highest applicable legal rate for open account business credit in the state of the borrower's domicile, not to exceed 1.5% per month.
After the maturity of the Business Note, whether by acceleration or otherwise, interest accrues on the principal balance at a fixed rate of 18% per annum. A charge of $40.00 will be assessed for each installment returned unpaid due to non-sufficient funds or account closure. This differentiation between interest rates before and after the maturity of the Business Note is an important consideration for franchisees managing their initial investment payments.