What insufficient funds fee does Cinnaholic charge for dishonored payments?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
ll bear interest from the date due at the rate specified by Franchisor from time to time, up to the highest rate permitted by the law, but in no event shall such rate exceed 18% per annum. Interest shall accrue on all late payments regardless of whether Franchisor exercises its right to terminate this Agreement as pro
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, if a franchisee's check, automated bank draft payment, or other payment method is not honored by their financial institution, Cinnaholic may charge a $100 insufficient funds fee for each occurrence. This fee is in addition to any interest Cinnaholic may charge on overdue payments.
This policy highlights the importance of franchisees maintaining sufficient funds in their accounts to cover all payments to Cinnaholic. Franchisees should ensure they have systems in place to track their payment obligations and avoid late payments or dishonored payments. The $100 fee, while seemingly small, can add up quickly if multiple payments are dishonored, impacting the franchisee's profitability.
Many franchisors have similar policies regarding late and insufficient funds fees. These fees are designed to cover the administrative costs and potential financial losses incurred by the franchisor due to late or dishonored payments. Franchisees should be aware of these policies and factor them into their financial planning to avoid unnecessary expenses.