To what fees does the interest apply to for a Cr3 American Exteriors franchise?
Cr3_American_Exteriors Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF FEE | AMOUNT | DUE DATE (Note 2) | REMARKS |
|---|---|---|---|
| (Note 1) | |||
| Interest | Highest applicable legal rate not to exceed 12% per annum on amounts you owe. | As incurred | Applies to all Royalty Fees, Technology Fee, Advertising Fund contributions and any other amounts that are past due for more than 5 days. |
| Audit Fee | Cost of audit plus 18% interest per annum on underpayment and $50 per month late payment. | As invoiced | Payable if an audit discloses an under reporting of Gross Revenues or underpayment to us by 2% or more. |
Source: Item 6 — OTHER FEES (FDD pages 18–20)
What This Means (2025 FDD)
According to Cr3 American Exteriors's 2025 Franchise Disclosure Document, interest may be applied to several fees. Specifically, interest, at the highest applicable legal rate not exceeding 12% per annum, can be charged on outstanding Royalty Fees, Technology Fees, and Advertising Fund contributions. This interest applies to any of these amounts that remain unpaid for more than 5 days.
In addition to the fees mentioned above, Cr3 American Exteriors also charges interest on underpayments discovered during an audit. If an audit reveals that a franchisee has underreported Gross Revenues or has underpaid Cr3 American Exteriors by 2% or more, the franchisee will be responsible for the cost of the audit. Furthermore, Cr3 American Exteriors will charge interest at a rate of 18% per annum on the underpayment, along with a $50 per month late payment fee.
As a prospective Cr3 American Exteriors franchisee, it's crucial to understand these potential interest charges and ensure timely payments to avoid incurring additional costs. Paying close attention to accurate reporting of Gross Revenues is also essential to prevent audits and associated penalties.