What is the maximum annual interest rate Cinch I.T. can charge in California?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
NOTES:
- (1) All fees are uniformly imposed by and payable only to us or our designee and are payable through Electronic Funds Transfer. Maximum interest permitted in California is 10% annually. You must authorize your bank to accept automatic withdrawals for all fees to us through EFT of the stated amount from your bank into our bank account when due. You must provide us with all documents necessary to direct your bank to honor these pre-authorized bank debits. (See Franchise Agreement, EFT Authorization). All fees are non-refundable.
Source: Item 6 — OTHER FEES (FDD pages 14–20)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, the maximum annual interest rate that Cinch I.T. can charge in California is 10%. This applies to fees that may be overdue to Cinch I.T.
In practical terms, this means that if a Cinch I.T. franchisee in California fails to pay fees on time, Cinch I.T. can charge interest on the overdue amount, but the annual interest rate cannot exceed 10%. This is an important consideration for prospective franchisees as it sets a limit on the amount of interest they may incur due to late payments.
It is important to note that while Cinch I.T. can charge up to 10% annually in California, the interest rate charged on overdue payments is 1.5% per month. However, the disclosure clarifies that if the maximum interest rate permitted by state law is less, then interest will be charged at the lesser allowed rate. Therefore, the 10% annual rate mentioned in the notes section is the controlling rate.