What is the late charge for each delinquent payment to Corner Bakery Cafe?
Corner_Bakery_Cafe Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee(1) | Amount | Due Date(2) | Remarks |
|---|---|---|---|
| Interest and Late Charge | Interest: 18% per annum or the maximum rate permitted by law, whichever is less; Late Charge: $500 for each delinquent payment | When any payment or report is not actually received by us on or before the due date | Interest is due on the amount owed from the date due until paid. We may also require you to provide a letter of credit from a national bank, on terms set forth in the Manual, equal to 150% of all fees (including Royalty Fees, marketing contributions and fees, interest and other payments due to us) anticipated to be due annually under all agreements that you have with us and our affiliates. |
Source: Item 6 — OTHER FEES (FDD pages 11–16)
What This Means (2025 FDD)
According to Corner Bakery Cafe's 2025 Franchise Disclosure Document, a franchisee will be assessed a late charge of $500 for each delinquent payment. Additionally, Corner Bakery Cafe may charge interest on the amount owed from the date it was due until it is paid. The interest rate will be 18% per annum, or the maximum rate permitted by law, whichever is less.
This means that if a Corner Bakery Cafe franchisee fails to make a payment on time, they will incur a substantial late fee in addition to potential interest charges. This could significantly increase the amount owed to the franchisor and impact the franchisee's profitability. Franchisees should ensure they have sufficient funds to cover all payments to avoid these penalties.
Furthermore, Corner Bakery Cafe has the right to demand a letter of credit from a national bank, equivalent to 150% of all annual fees due, including royalty fees, marketing contributions, interest, and other payments. This letter of credit would be held as security for future payments. This requirement could place a significant financial burden on the franchisee, especially when starting the business.