What is the highest permissible interest rate charged on late payments to Degree Wellness?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
bsite and technology-related services 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
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, franchisees may be charged 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 the actual interest rate charged could vary depending on the franchisee's location and applicable state laws regarding commercial contract interest rates.
However, for California franchisees, a specific addendum states that any interest rate charged must comply with the California Constitution. The interest rate for California franchisees cannot exceed either (a) 10% annually or (b) 5% annually plus the prevailing interest rate charged to banks by the Federal Reserve Bank of San Francisco, whichever is higher. This ensures that Degree Wellness complies with California's regulations regarding interest rates.