What interest rate will Dollar Rent A Car charge on unpaid obligations?
Dollar_Rent_A_Car Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee 1 | Amount | Due Date | Remarks |
|---|---|---|---|
| Interest and Late Fees 11 | Interest at the lesser of the rate we prescribe, or the maximum rate allowed by law, plus a late fee of not less than 5% of the total amount overdue. | Upon demand | Payable on all overdue amounts. See Footnote 11. |
Source: Item 6 — OTHER FEES (FDD pages 39–46)
What This Means (2025 FDD)
According to Dollar Rent A Car's 2025 Franchise Disclosure Document, interest will be charged on all overdue amounts at a rate that is the lesser of the rate Dollar Rent A Car prescribes or the maximum rate allowed by law. In addition to interest, Dollar Rent A Car will charge a late fee of not less than 5% of the total amount overdue.
This means that if a Dollar Rent A Car franchisee fails to pay amounts owed to the company on time, they will incur both interest charges and a late fee. The interest rate will be determined by Dollar Rent A Car, but it will not exceed the maximum rate permitted by applicable law. The late fee is a minimum of 5% of the overdue amount, but Dollar Rent A Car could potentially charge a higher late fee.
Franchisees should be aware of these potential charges and ensure that they pay all amounts owed to Dollar Rent A Car on time to avoid incurring interest and late fees. It is important to note that the specific interest rate that Dollar Rent A Car prescribes is not detailed in this section, so prospective franchisees should clarify this rate during their due diligence.
This type of fee is relatively standard in franchising, as franchisors need to ensure timely payments from franchisees to maintain their own financial stability. Franchise agreements typically outline the penalties for late payments, including interest and late fees, to incentivize franchisees to meet their financial obligations.