Does the interest rate charged by Cream on late payments depend on state law?

According to Cream's 2025 Franchise Disclosure Document, the interest rate charged on late payments is determined by state law. Cream will charge interest on all overdue amounts at a rate of 1.5% per month, or the highest commercial contract interest rate permitted by law, whichever is less. This means that the maximum interest Cream can charge may vary depending on the state where the franchise is located, as different states have different regulations regarding commercial contract interest rates.

This policy protects franchisees from potentially excessive interest rates on late payments, as Cream must adhere to the legal limits set by each state. Franchisees should be aware of the specific interest rate laws in their state to understand the maximum interest Cream can legally charge. It is important to note that Cream has the right to apply payments to any past due debts, regardless of any specific designation the franchisee might make.

In addition to interest on late payments, Cream also charges a service fee for returned checks due to insufficient funds. This fee will be the lesser of Cream's current service fee or the highest amount permitted by applicable law. This ensures that the fee for returned checks also complies with state regulations. Franchisees should be aware of these potential fees and ensure they have sufficient funds to cover payments to avoid incurring these charges.

Cream's ability to set maximum or minimum prices for products and services is also subject to applicable law. This means that in some states, Cream may be restricted from setting price limits. Franchisees should be aware of any such restrictions in their state, as they could affect their pricing strategies.