What interest rate does Cinch I.T. charge on overdue payments?
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. |
| Transfer, Assignment | $10,000 | Time of transfer | Payable if you sell your franchise. No fee charged if you transfer franchise to a corporation or other entity you control. |
| Transfer Fee – Development Agreement | $5,000 for each unopened Franchise; $10,000 for each open and operating Franchised Business. | Time of transfer | Payable if Multi-Unit Developer sells its franchise. No fee charged if you transfer franchise to a corporation or other entity you control. |
| Multi-Unit Extension Fee – Development Agreement | $5,000 per extension | As incurred | Payable if Multi-Unit Developer desires to extend a Development Period. |
| Renewal | $5,000 | Time of renewal | New franchise agreement, which may |
Source: Item 6 — OTHER FEES (FDD pages 14–20)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, if a franchisee makes a late payment, Cinch I.T. charges interest on the overdue amount. The interest rate is 1.5% per month. However, if the maximum interest rate permitted by the applicable state law is less than 1.5% per month, Cinch I.T. will charge the lower rate. Interest accrues beginning from the original date the payment was due.
In addition to interest on overdue payments, Cinch I.T. also charges a $100 late fee per occurrence if a franchisee is delinquent in their payments or otherwise violates an obligation under the Franchise Agreement. This late fee, along with the accrued interest, is payable on demand the day after the payment or other required event (such as submitting a report) is due.
It is important for prospective Cinch I.T. franchisees to understand these policies regarding late payments and associated fees. Franchisees should ensure they have sufficient capital and financial management systems in place to make all payments to Cinch I.T. on time, in order to avoid incurring these additional charges. Understanding the specific regulations regarding maximum interest rates in their state is also crucial to anticipating potential costs.