What is the maximum interest rate that can be charged to a California Deka Lash franchisee?

According to the 2024 Deka Lash Franchise Disclosure Document, any interest rate charged to a franchisee in California must comply with the state's constitution. The maximum interest rate is determined by whichever of the following is higher: either 10% annually, or 5% annually plus the prevailing interest rate charged to banks by the Federal Reserve Bank of San Francisco.

This means that if a Deka Lash franchisee in California owes money to the franchisor, the interest rate applied to the outstanding balance cannot exceed the limits set by California law. The interest rate will be the higher of a fixed 10% or a variable rate tied to the Federal Reserve Bank of San Francisco's rate plus 5%.

For a prospective Deka Lash franchisee in California, it's important to understand these interest rate limitations, as they protect the franchisee from excessively high interest charges on any debts owed to the franchisor. Franchisees should stay informed about the prevailing interest rates charged by the Federal Reserve Bank of San Francisco to understand how the variable rate component could affect them.