What is the interest rate charged by Cream on late payments?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks 1, 2 |
|---|---|---|---|
| Interest on Late Payment | Lesser of 1.5% per month or the highest commercial contract rate allowed by law | As incurred | All amounts which you owe us for any reason will bear interest accruing as of their due dates until payment is received in full. |
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, if a franchisee makes a late payment to Cream, the interest charged will be the lesser of 1.5% per month or the highest commercial contract rate allowed by law. This interest accrues on all outstanding amounts from their due dates until the payment is received in full.
This means that if a franchisee is late on any payment owed to Cream, they will incur interest charges. The specific amount will depend on the applicable legal limits for commercial contracts in their jurisdiction, but it will not exceed 1.5% per month. Franchisees should be aware of this policy and ensure timely payments to avoid these charges.
It is common practice in franchising for franchisors to charge interest on late payments to encourage franchisees to meet their financial obligations promptly. The interest rate specified by Cream appears to be within the typical range for such fees. Franchisees should factor this potential cost into their financial planning and budgeting.