What is the annual interest rate charged on unpaid amounts owed to Chocolate Bash?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| $100 plus interest on | On demand | We may charge a late fee if you fail to | |
| the unpaid amount at | make a required payment when due. | ||
| a rate equal to 18% | |||
| per year (or, if such | |||
| payment exceeds the | |||
| maximum allowed | |||
| by law, then interest | |||
| at the highest rate | |||
| allowed by law) | |||
| $30 (or, if such |
Source: Item 6 — OTHER FEES (FDD pages 9–13)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, if a franchisee fails to make a required payment when due, Chocolate Bash may charge a late fee. This late fee includes interest on the unpaid amount.
The annual interest rate is 18% per year. However, if this rate exceeds the maximum interest rate allowed by law, Chocolate Bash will charge the highest interest rate legally permitted.
This means a prospective Chocolate Bash franchisee could face significant penalties for late payments, up to 18% annually or the maximum legal rate, potentially impacting their profitability. Franchisees should ensure they understand the payment terms and have sufficient cash flow to avoid these charges.