What interest rate applies to late rent payments for a Churchs Chicken sublease?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
If Rent is not paid according to the terms of this Sublease, it shall be subject to the late fee, interest, and other terms and conditions, specified in the Master Lease.
Notwithstanding the foregoing, if Sublessor has already provided Sublessee with two (2) such notices in a calendar year, and if any subsequent Rent payment is not received by Sublessor when due, then the interest and the late charge described above shall be immediately applicable without notice.
(c) without terminating this Sublease, declare the entire amount of Base Rent and Additional Rent which would become due and payable during the remainder of the Term of this Sublease to be due and payable immediately which total amount shall be discounted to its present value (discounted at a rate equal to 8% per annum); in which event, Sublessee agrees to pay the same at once; provided, however, thatsuch paymentshall not constitute a penalty or forfeiture or liquidated damages, butshall merely constitute payment in advance of the rent for the remainder of said Term. Upon making such payment, Sublessee shall receive from Sublessor all base rental and additional rents as they are received by Sublessor from any other Sublessee of the Premises until the expiration date of this Sublease; provided, however, that the monies to which Sublessee shall become entitled shall in no event exceed the entire amount payable by Sublessee as provided in this subparagraph (c) less all costs expenses and attorney's fees of Sublessor incurred in connection with the reletting of the Premises. In the event Sublessee shall fail promptly to pay to Sublessor the accelerated Base Rent and Additional Rent provided for herein, Sublessor may pursue an action at law or in equity to recover such amount from Sublessee, and Sublessee shall be liable for all costs and expenses (including court costs and attorneys' fees) incurred by Sublessor in pursuing such action.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, if a sublessee fails to pay rent according to the terms of the sublease, the late fee, interest, and other terms and conditions specified in the Master Lease will apply. This means that the specific interest rate for late rent payments is not explicitly stated in the sublease agreement itself but is instead governed by the terms outlined in the Master Lease between the sublessor and the master landlord.
In cases where the sublessor has already provided the sublessee with two notices of late payment within a calendar year, any subsequent rent payment not received when due will immediately incur the interest and late charge described above, without any further notice. This provision is in addition to all other rights and remedies available to the sublessor under the sublease or at law and is not considered liquidated damages or a limitation of remedies.
Additionally, if Churchs Chicken, acting as a sublessor, declares the entire amount of base rent and additional rent due for the remainder of the sublease term to be immediately payable due to a default, this total amount will be discounted at a rate of 8% per annum to its present value. If the sublessee fails to pay this accelerated amount promptly, Churchs Chicken may pursue legal action to recover the amount, and the sublessee will be liable for all associated costs and expenses, including court costs and attorneys' fees.