Is there a limit to the interest rate Desi District can charge on late payments?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
ss Sales. Franchisee acknowledges that Desi District Franchise Group has the right to remotely access Franchisee's point-of-sale system to calculate Gross Sales.
- (c) Late Fees and Interest. If Franchisee does not make a payment on time, Franchisee shall pay a $100 "late fee" plus interest on the unpaid amount at a r
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, there is a limit to the interest rate they can charge on late payments. Desi District can charge a $100 late fee plus interest on the unpaid amount at a rate of 18% per year. However, if this rate exceeds the maximum allowed by law, the interest rate will be the highest rate allowed by law.
This means that while Desi District sets a standard interest rate for late payments, they must comply with any applicable laws that set a maximum allowable interest rate. This protects the franchisee from excessively high-interest charges that might be illegal in their jurisdiction.
For a prospective franchisee, this clause provides some assurance that late payment penalties will not be unfairly high. It is important to be aware of both the stated interest rate of 18% per year and the potential for that rate to be adjusted downward if it exceeds legal limits in the franchisee's area.