When is interest charged on overdue amounts for a Cr3 American Exteriors franchise?
Cr3_American_Exteriors Franchise · 2025 FDDAnswer from 2025 FDD Document
non-refundable.
ITEM 6 OTHER FEES
| TYPE OF FEE | AMOUNT | DUE DATE (Note 2) | REMARKS |
|---|---|---|---|
| (Note 1) | |||
| Royalty Fee | The greater of (i) 6.0% of monthly Gross Revenue collected (the “Royalty Fee”) or (ii) $2,000.00 (the “Minimum Royalty Fee”). (Note 3) | By the 10th day of the month. | Royalty Fee’s start the first month in operation; however, the Minimum Monthly Royalty Fee, if applicable, will not begin until the 7th month of operation. Payments are due on |
| TYPE OF FEE | AMOUNT | DUE DATE (Note 2) | REMARKS |
| --- | --- | --- | --- |
| (Note 1) | |||
| Credit Card Processing Fee | Then current rate charged by third- party credit card processor. | At time of charge | You agree to pay a credit card processing fee if you pay any sums to us by credit card, to the extent permitted by law. |
| Insufficient Funds Fee | $50 per transaction. | As incurred | You agree to pay this fee to us if an electronic transfer or other payment from you to us is declined. |
| 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. |
| TYPE OF FEE (Note 1) | AMOUNT | DUE DATE (Note 2) | REMARKS |
| ------------------------------- | -------------------------------------------------------------------------------------------------------- | ------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| Credit Card Processing Fee | Then current rate charged by third party credit card processor. | At time of charge | You agree to pay a credit card processing fee if you pay any sums to us by credit card, to the extent permitted by law. |
| Insufficient Funds Fee | $50 per transaction. | As incurred | You agree to pay this fee to us if an electronic transfer or other payment from you to us is declined. |
| 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 Revenue |
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 is charged on overdue amounts. Specifically, Cr3 American Exteriors charges interest at the highest applicable legal rate, but it will not exceed 12% per annum. This interest applies to all Royalty Fees, Technology Fees, Advertising Fund contributions, and any other amounts that are past due for more than 5 days.
For a prospective Cr3 American Exteriors franchisee, this means that if any payments, such as royalty fees, technology fees, or advertising fund contributions, are not paid on time and remain overdue for more than 5 days, interest charges will be applied. The interest rate will be the highest legally permissible rate, but it will not exceed 12% per year.
Franchisees should ensure timely payments to avoid incurring these interest charges. It is a fairly standard practice in franchising to charge interest on overdue amounts, as it incentivizes franchisees to manage their finances responsibly and meet their payment obligations to the franchisor. The specific interest rate and the grace period before interest is applied can vary among different franchise systems.