What is the highest interest rate Degree Wellness will charge on late payments?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
ices and expenses and any fees relating to the required human resources and payroll services discussed in Section 10.7.
- 6.5 Fees Relating to Optional Programs. We, or our affiliates, may offer additional optional services, products or programs in connection with your Studio Franchise, subject to an additional fee paid to us or third-parties.
- 6.6 Interest on Late Payments. All Continuing Franchise Fees, Fund contributions, amounts due from you for purchases from us or our affiliates, and other amounts which you owe us or our affiliates (unless otherwise provided for in a separate agreement between us or our affiliates) will begin to accrue interest after their respective due dates at the lesser of (i) the highest commercial contract interest rate permitted by state law, and (ii) the rate of fifteen percent (15%) per annum. You acknowledge that the inclusion of this Paragraph in this Agreement does not mean we agree to accept or condone late payments, nor does it indicate that we have any intention to extend credit to, or otherwise finance your purchase or
operation of the Franchise. We have the right to require that any payments due us or our affiliates be made by certified or cashier's check, wire transfer or electronic funds transfer in the event that any payment by check is not honored by the bank upon which the check is drawn.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, franchisees may incur interest on late payments. Specifically, all continuing franchise fees, fund contributions, amounts due for purchases from Degree Wellness or its affiliates, and other amounts owed to Degree Wellness or its affiliates will accrue interest after their due dates. The interest rate will be the lesser of (i) the highest commercial contract interest rate permitted by state law, or (ii) a fixed rate of fifteen percent (15%) per annum.
This means that if a Degree Wellness franchisee fails to make timely payments for any of the aforementioned obligations, they will be subject to interest charges. The actual interest rate applied will depend on the state law where the franchise is located; if the state law allows for a commercial contract interest rate higher than 15%, Degree Wellness will only charge up to 15%. Conversely, if the state law caps the commercial contract interest rate below 15%, that lower rate will apply.
It is important to note that Degree Wellness explicitly states that including this interest on late payments clause does not imply they condone late payments or intend to extend credit to franchisees. Degree Wellness retains the right to demand payments via certified check, cashier's check, wire transfer, or electronic funds transfer if a regular check is not honored. Additionally, Degree Wellness can charge a $100 fee for any check payment that is not honored by the bank.