At what annual interest rate does Creative World School charge on late payments?
Creative_World_School Franchise · 2025 FDDAnswer from 2025 FDD Document
- 6.09 Interest on Late Payments.
All amounts which you owe us will bear interest after their due date at the annual rate of 18% or the highest contract rate of interest permitted by law, whichever is less.
You acknowledge that we do not agree to accept any payments after they are due nor commit to extend credit to, or otherwise finance your operation of, the School.
Your failure to pay all amounts when due constitutes grounds for termination of this Agreement.
- 6.10 Late Payment Penalties.
All Royalties, Advertising Contributions, Painting Fee, Decorator Fee, amounts due for purchases by you from us, and any interest accrued thereon, and any other amounts which you owe us, or our affiliates, are subject to a late payment fee of 5% of the amount due.
The late payment fee is due immediately on any delinquent payments.
The provision in this Agreement concerning late payment fees does not mean that we accept or condone late payments, nor does it indicate that we are willing to extend credit to, or otherwise finance the operation of, your School.
- 6.11 Application of Payments.
Notwithstanding any designation you might make, we may apply any of your payments to any of your past due indebtedness to us.
You acknowledge and agree that we have the right to set off any amounts you or your owners owe us against any amounts we might owe you or your owners.
Source: Item 23 — RECEIPTS (FDD pages 80–247)
What This Means (2025 FDD)
According to Creative World School's 2025 Franchise Disclosure Document, any amounts owed to Creative World School will incur interest after the due date. This interest is calculated at an annual rate of 18%, or the highest contract rate of interest permitted by law, whichever is less. This means a franchisee could face a substantial financial penalty for failing to make timely payments.
In addition to interest, Creative World School also charges late payment penalties. These penalties include a fee of 5% of the amount due on royalties, advertising contributions, painting fees, decorator fees, amounts due for purchases from Creative World School, and any interest accrued. This fee is due immediately on any delinquent payments, compounding the financial burden of late payments.
Creative World School emphasizes that these late payment provisions do not imply a willingness to accept or condone late payments, nor do they indicate any commitment to extend credit or finance the franchisee's operations. The franchisor retains the right to apply any payments to past due indebtedness, regardless of any designation the franchisee might make. Furthermore, Creative World School can offset any amounts owed by the franchisee or their owners against any amounts Creative World School might owe to them.