When is interest charged on overdue amounts for a Cordova franchise?
Cordova Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee (Note 1) | Amount | Due Date | |
|---|---|---|---|
| Interest | 18% per annum from due date | On demand | Payable on all overdue amounts, fees, charges, and payments due to us under the Franchise Agreement. Interest rate cannot exceed legal rate allowed by law and may be adjusted to reflect same. |
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2025 FDD)
According to Cordova's 2025 Franchise Disclosure Document, interest is charged on all overdue amounts, fees, charges, and payments due to Cordova under the Franchise Agreement. The interest rate is 18% per annum from the due date. This interest is payable on demand. However, the interest rate cannot exceed the legal rate allowed by law and may be adjusted to reflect the legal rate.
This means that if a Cordova franchisee fails to make payments on time, they will incur an interest charge of 18% per year on the outstanding balance. This interest accrues from the original due date of the payment. Cordova has the right to demand immediate payment of this interest.
It is important for prospective Cordova franchisees to be aware of this policy and to ensure that they make all payments on time to avoid incurring interest charges. Franchisees should also be aware of the potential for the interest rate to be adjusted to reflect the legal rate, which could be higher or lower than 18% depending on applicable laws. This is a fairly standard clause in franchise agreements to protect the franchisor from late payments.