What interest rate does Craters & Freighters charge per month on late royalty payments?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
Accounts and Notes Receivable
Accounts and notes receivable consist of current and past due franchise support fees and royalties. Late payments may be subjected to a one and a half percent interest fee per month on the total amount of late royalty payment. The Company received interest from royalty payments totaling $3,424 and $2,604 for the years ended December 31, 2024 and 2023, respectively.
At the Company's discretion, unpaid franchisee balances may be converted to a note receivable with payment terms between twenty-four and thirty-six months, accruing interest at six percent. As of December 31, 2024, there was $16,991 in outstanding notes receivable from franchisees relating to unpaid balances, of which $11,662 is due within one-year and $5,329 is due in 12-24 months. As of December 31, 2023, there were no Franchisee accounts with past due balances converted to notes receivable. Default on notes receivable will result in a termination of the related franchise agreements b
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to Craters & Freighters's 2025 Franchise Disclosure Document, the company may subject late royalty payments to a 1.5% interest fee per month on the total amount of the late payment.
For a prospective franchisee, this means that if royalty payments are not made on time, Craters & Freighters has the discretion to charge this interest fee. This could significantly increase the amount owed if payments are consistently late. Franchisees should ensure they have a system in place to make timely payments to avoid these charges.
In 2024, Craters & Freighters received $3,424 in interest from royalty payments, and $2,604 in 2023. Additionally, Craters & Freighters may convert unpaid franchisee balances to a note receivable with payment terms between 24 and 36 months, accruing interest at 6%. Default on these notes receivable will result in a termination of the franchise agreement.