What is the maximum interest rate Desi District can charge for late fees?
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 due, Desi District may charge a late fee. This late fee consists of a $100 charge, plus interest on the unpaid amount.
The interest rate applied to the unpaid amount will be 18% per year. However, the FDD specifies a condition where the 18% interest rate might not apply.
Specifically, if the 18% interest rate exceeds the maximum interest rate allowed by law in the relevant jurisdiction, then Desi District will instead charge interest at the highest rate legally permitted. This protects the franchisee from illegally high interest charges while still allowing Desi District to recoup losses from late payments.