What interest rate does Cinnabon charge on past due Billable Support Fees?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
Payment of Billable Support Fees; Interest on Past Due Amounts.
Billable Support Fees shall be paid by Franchisee within thirty (30) days of being invoiced by Company.
Franchisee must pay Company interest on any amounts past due at the rate of 1.5% per month or portion of month, but not more than the maximum interest rate permitted by applicable law.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, franchisees must pay interest on any past due amounts, including Billable Support Fees, at a rate of 1.5% per month or portion of a month. However, the interest rate will not exceed the maximum interest rate permitted by applicable law.
This means that if a Cinnabon franchisee fails to pay their Billable Support Fees within the stipulated timeframe, Cinnabon has the right to charge interest on the outstanding balance. The 1.5% monthly interest can quickly add up, so it's crucial for franchisees to manage their finances effectively and ensure timely payments to avoid these charges.
Franchisees should be aware of the importance of adhering to the payment terms outlined in the franchise agreement to avoid incurring interest charges and potential default. Understanding the maximum interest rate permitted by applicable law is also important, as this could vary depending on the franchisee's location.