When does the interest charge apply to overdue amounts for a Devon Creek franchise?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
| V1 | Amount | Due Date | Remarks |
|---|---|---|---|
| Taxes | Amount of taxes | When incurred. | You must reimburse us for any taxes that we must pay to any taxing authority on account of either the operation of your Franchised Business or payments that you make to us, including, but not limited to any sales taxes or income taxes imposed by any authority. |
| Insurance | Cost of insurance; If you fail to maintain the required insurance, we have the right to procure insurance on your behalf and you must pay us, on demand, for the costs and premiums we incur plus 10% | As incurred | You are required to maintain the types and amounts of insurance specified in Item 8 and, as more detailed, the Franchise Agreement. |
| Interest Charge | 1.5% per month from due date, or maximum allowed by law | As incurred | Due on all overdue amounts from the date the amounts were originally due. |
| Indemnification Will vary under circumstances | As incurred | You must reimburse us if we are held liable for claims directly or indirectly arising out of your Devon Creek Franchise, operation. See Footnote 8. | |
| Costs and Attorney's Fees | Will vary under circumstances | As incurred | Payable to us |
| Mystery Shop or Quality | Actual Cost. | As incurred. | Payable to third-party providers or us. See footnote 11. |
| Assurance Services |
Source: Item 6 — OTHER FEES (FDD pages 8–16)
What This Means (2024 FDD)
According to Devon Creek's 2024 Franchise Disclosure Document, an interest charge of 1.5% per month, or the maximum allowed by law, will be applied to all overdue amounts. This interest is calculated from the original due date of the unpaid amount.
This means that if a Devon Creek franchisee fails to pay fees like the Continuing Royalty Fee or Brand Fund Fee on time, they will incur this interest charge in addition to other penalties. The interest charge serves as a financial disincentive for late payments and compensates Devon Creek for the delay in receiving funds.
Prospective franchisees should be aware of this policy and ensure they have sufficient financial planning to meet all payment deadlines. Failure to do so can result in accumulating interest charges, which can negatively impact their profitability. It is also important to note that this interest charge is in addition to a $50 per day late fee for failing to pay the Continuing Royalty Fee, Brand Fund Fee, or submitting the Gross Revenue report when due.