What is the maximum interest rate that can be charged on overdue amounts for City Publications?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Late Fees | $100 per occurrence, plus interest on overdue amount at highest applicable legal rate, not to exceed 1.5% per month | With late payment | Applies to all Royalty Fee or other fee payments, postage expenses and other amounts due us or our Affiliate (Section 4.K) Note that the maximum interest rate in California is 10% annually. |
Source: Item 6 — OTHER FEES (FDD pages 10–13)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, a franchisee may be charged interest on overdue amounts. Specifically, City Publications may charge a late fee of $100 per occurrence, in addition to interest on the overdue amount. This interest will be charged at the highest applicable legal rate, but it will not exceed 1.5% per month. The FDD also notes that the maximum interest rate in California is 10% annually.
This means that if a City Publications franchisee is late on a payment, they will incur an immediate $100 late fee. Furthermore, interest will accrue on the outstanding balance. While the interest rate is tied to the highest legally permissible rate, City Publications caps it at 1.5% per month, which is equivalent to 18% annually.
For franchisees operating in California, it's important to note the disclosure regarding the 10% annual interest rate cap. While the standard agreement allows for up to 1.5% per month, California law may supersede this, limiting the interest to 10% annually. Franchisees should verify the applicable interest rate based on their local and state regulations to ensure compliance and avoid potential disputes with City Publications.