What is the exception to the interest rate charged by Chocolate Fish Coffee on unpaid amounts?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
actual fees after Franchisee reports Gross Sales. Franchisee acknowledges that Chocolate Fish Franchising has the right to remotely access Franchisee's pointof-sale system to calculate Gross Sales.
- (c) Late Fees and Interest. If Franchisee does not make a payment on time, Franchisee sha
Source: Item 23 — RECEIPTS (FDD pages 41–119)
What This Means (2024 FDD)
According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, if a franchisee does not make payments on time, they will incur a $100 late fee and interest on the unpaid amount. The standard interest rate is 18% per year. However, there is an exception: if this 18% interest rate exceeds the maximum rate allowed by law, the interest charged will be the highest rate legally permissible.
This means that Chocolate Fish Coffee will not charge an interest rate that violates any applicable laws or regulations regarding maximum interest rates. The specific legal maximum will vary depending on the franchisee's location and relevant jurisdiction.
For a prospective franchisee, this clause ensures that the interest charged on late payments will not be excessive or illegal. It is important to be aware of the potential for late fees and interest charges and to understand the legal limitations on interest rates in the relevant jurisdiction.