What interest rate does Cinch I.T. charge on overdue payments, and from when does the interest accrue?
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 state law is less than 1.5% per month, Cinch I.T. will charge the lower rate allowed by law.
The interest on overdue payments begins accruing from the original date the payment was due. This means that even a short delay in payment can result in interest charges.
In addition to interest on overdue payments, Cinch I.T. also charges a late fee of $100 per occurrence, plus interest, if a franchisee is delinquent in their payments or otherwise violates an obligation under the Franchise Agreement. This late fee is payable the day after the payment or other event (such as a required report) is due. Prospective franchisees should be aware of these potential costs and ensure they have sufficient capital and a system in place to manage payments and obligations to avoid incurring these fees.