What is the late charge for overdue payments related to a Creative World School loan?
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.
Source: Item 23 — RECEIPTS (FDD pages 80–247)
What This Means (2025 FDD)
According to Creative World School's 2025 Franchise Disclosure Document, there are specific penalties and interest charges associated with late payments. If a franchisee fails to make payments on time, Creative World School can impose both interest and late payment fees.
The franchise agreement stipulates that all overdue amounts will accrue interest from the due date at an annual rate of 18%, or the highest contract rate permitted by law, whichever is less. This interest applies to all amounts owed to Creative World School.
In addition to interest, Creative World School also charges a late payment fee. This fee is 5% of the overdue amount and applies to royalties, advertising contributions, painting fees, decorator fees, amounts due for purchases from Creative World School, any accrued interest, and any other amounts owed to Creative World School or its affiliates. This late payment fee is due immediately on any delinquent payments.
It is important to note that these penalties do not obligate Creative World School to accept late payments or extend credit to the franchisee. Failure to pay amounts when due can result in termination of the franchise agreement.