What interest rate will Chicken Guy charge on late payments?

According to the 2025 Chicken Guy Franchise Disclosure Document, if a franchisee fails to make payments by the due date, Chicken Guy will charge interest on the outstanding amount. The interest rate will be the maximum rate permitted for this type of debt in the state where the franchised restaurant is located. However, this rate will not exceed 1.5% per month, or a portion of a month, until the payment is made.

This means that a Chicken Guy franchisee could face a significant financial penalty for late payments, depending on the state's regulations. The 1.5% monthly cap translates to an annual interest rate of 18%, which is substantially higher than typical bank loan interest rates. Franchisees should prioritize timely payments to avoid these charges.

It is important to note that the interest charged on late payments is in addition to any other remedies and rights available to Chicken Guy under the Franchise Agreement or applicable law. This could include pursuing legal action to recover the unpaid amount and any associated costs. Chicken Guy also has the discretion to apply any payments received from the franchisee to any past due indebtedness, including royalty fees, advertising contributions, or interest charges.

Prospective franchisees should carefully consider the implications of late payment interest charges and ensure they have sufficient financial resources to meet their obligations to Chicken Guy on time. Understanding the specific regulations in their state regarding maximum interest rates is also crucial for financial planning.