How is the interest rate calculated on overdue payments to Cinch I.T.?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
| TYPE OF FEE1 | AMOUNT | DUE DATE | REMARKS |
|---|---|---|---|
| to client | must pay us for our time and any compensation (i.e., replacement product) given to clients. | ||
| Audits | Cost of audit plus interest on underpayment | As incurred | Payable only if audit shows understatement is willful or if 2% or more of gross sales for a two month period. |
| Interest | Interest on overdue payment | As incurred | Interest rate will be 1.5% per month or if the maximum interest rate permitted by state law is less, then interest will be charged at the lesser allowed rate. Interest begins from the date payment was due. |
| Late Fee | $100 per occurrence plus interest | On demand, but only if you are delinquent in your payments to us or otherwise violate an obligation under the Franchise Agreement | Payable the day after payment or other event (Ex: a required report) is due, in addition to the interest. |
Source: Item 6 — OTHER FEES (FDD pages 14–20)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, interest on overdue payments is calculated at a rate of 1.5% per month. However, if the maximum interest rate permitted by state law is less than 1.5% per month, then the interest will be charged at the lower legally allowed rate.
This interest begins accruing from the original date the payment was due. In addition to interest charges, Cinch I.T. also assesses a late fee of $100 per occurrence if a franchisee is delinquent in their payments or otherwise violates their obligations under the Franchise Agreement. This late fee, along with the interest, is payable the day after the payment or other required event (such as submitting a report) is due.
For a prospective Cinch I.T. franchisee, this means that failing to make timely payments can result in significant additional costs. It's crucial to understand the payment schedule and ensure compliance to avoid these charges. Franchisees should also be aware of the specific laws in their state regarding maximum interest rates, as those laws will take precedence if they are lower than the 1.5% monthly rate specified by Cinch I.T.