What is the interest rate charged by Chem Dry on late payments?
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, franchisees are subject to interest charges on late payments. Specifically, each discrete amount payable to Chem Dry or its affiliates under the Franchise Agreement will incur interest after its due date. The interest rate is 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.
In addition to interest on late payments, the FDD states that all amounts due to Chem Dry are subject to a one-time late fee of $100.00. After the maturity of the Business Note, interest accrues on the principal balance at a rate of 18% per annum. Furthermore, a charge of $40.00 will be assessed for each installment returned unpaid due to non-sufficient funds or a closed account.
Prospective Chem Dry franchisees should be aware of these late payment penalties and ensure they have sufficient capital and financial management practices in place to avoid incurring these charges. Understanding the specific regulations regarding interest rates in their state is also crucial to managing their financial obligations to Chem Dry.