What is the interest rate charged on late payments to Desi District?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
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| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Reimbursement | Amount that we spend on your behalf, plus 10% | Within 15 days of invoice | If we pay any amount that you owe or are required to pay to a third party, you must reimburse us. |
| Late fee | $100 plus interest on the unpaid amount at a rate equal to 18% per year (or, if such payment exceeds the maximum allowed by law, then interest at the highest rate allowed by law) |
Source: Item 6 — OTHER FEES (FDD pages 16–20)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, if a franchisee fails to make a required payment when it is due, Desi District may charge a late fee. This late fee consists of $100 plus interest on the unpaid amount. The interest rate is set at 18% per year. However, if this rate exceeds the maximum allowed by law, the interest rate will be the highest rate legally permitted.
This means that if a franchisee is late on a payment, they will incur an immediate $100 late fee. Additionally, they will be charged interest on the outstanding balance at an annual rate of 18%, unless local laws cap the interest rate at a lower level. Franchisees should be aware of this policy and ensure timely payments to avoid these additional charges.
Prospective franchisees should consult with a financial advisor to understand the implications of this late fee policy and how it could impact their business's financial health. It's also advisable to be aware of any local laws that may affect the maximum allowable interest rate, as this could influence the actual interest charged on late payments.