Does Crepe De Licious charge interest on trade credit extended to franchisees?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
Accounts receivable are carried at their estimated collectible amounts. Trade credit is generally extended on a short-term basis, thus accounts receivable do no bear interest, although a finance charge may be applied to such receivables that are past due.
Source: Item 23 — RECEIPTS (FDD pages 57–233)
What This Means (2025 FDD)
According to Crepe De Licious's 2025 Franchise Disclosure Document, trade credit is generally extended on a short-term basis, and accounts receivable do not bear interest. However, Crepe De Licious may apply a finance charge to receivables that are past due.
This means that while franchisees are not charged interest on standard trade credit terms, they could incur finance charges if they fail to pay within the agreed-upon timeframe. This is a fairly standard practice in franchising and business-to-business transactions, designed to encourage timely payments.
Prospective franchisees should clarify the specific terms of the trade credit, including the length of the short-term credit period and the amount of the finance charge that would be applied to past due receivables. Understanding these terms is essential for managing cash flow and avoiding unexpected costs.