What is the maximum interest rate Dq Treat can charge on overdue amounts?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
m when due. Licensee is responsible for any penalties, fines or other similar expenses associated with the transfer of funds described in this subparagraph. Company may require Licensee to pay as described in this section, regardless of whether Company imposes the same requirement on other DQ® licensees.
- 9.7 Interest; Late Fees. All amounts owed by Licensee to Company or its affiliates under this agreement will bear interest at the lesser of 18% per annum or the maximum rate of interest permitted by governing law. Company may also charge Licensee a $50 fee for each late report or payment owed to Company under this agreement. This fee is not interest or a penalty, but compensates Company for increased administrative and management costs due to late payment. A payment is late if:
- (A) It is not received by Company on or before the date due;
- (B) The payment is received by Company on or before the date due, but is not honored by Licensee's bank or financial institution; or
- (C) There are insufficient funds in Licensee's bank account on or after the due date to collect a payment by the method of payment described in section 9.7.
9.8 Reports.
- (A) Monthly Report. Licensee must electronically (or using another method periodically required by Company) complete and submit to Company monthly reports with information from the previous calendar month on Company's then-current form. The reports are due within 10 days after the end of each month. The report must include the following information:
- (1) Amount of gross receipts of the Restaurant;
- (2) Amount of sales tax;
- (3) Gross Sales and the computation of the continuing license fee, sales promotion program fee, and any other applicable fees listed in section 9;
Source: Item 17 — The following paragraph is added to the end of Item 17 of the Disclosure Document: (FDD pages 70–378)
What This Means (2025 FDD)
According to the 2025 Dq Treat FDD, the interest rate charged on overdue amounts can vary depending on the specific agreement and the entity to which the payment is owed. For amounts owed to Dq Treat or its affiliates under the operating agreement, the interest rate is the lesser of 18% per annum or the maximum rate permitted by governing law. Additionally, Dq Treat may charge a $50 fee for each late report or payment. This fee is not considered interest or a penalty but is intended to compensate Dq Treat for increased administrative and management costs due to the late payment. A payment is considered late if it is not received by the due date, is not honored by the licensee's bank, or if there are insufficient funds in the licensee's account on or after the due date.
For SSS Service Fees, an interest charge of 1.5% per month, or the maximum applicable under state law, will be applied to all overdue accounts, to the extent permitted by law. Similarly, for fees owed to Punchh, delinquent payments for undisputed fees on invoices that require no further revision, and that remain past due are subject to late payment fees of 1.5% of the overdue balance per month (or the maximum amount permitted by law, whichever is lower) starting sixty (60) days after a payment's due date.
These stipulations mean that a Dq Treat franchisee could face varying interest rates on overdue amounts depending on whether the debt is to Dq Treat directly, for SSS service fees, or for fees related to services provided by Punchh. It is important for prospective franchisees to understand these different potential rates and the conditions under which they apply to manage their finances effectively and avoid incurring unnecessary charges. Franchisees should also be aware of additional late fees, such as the $50 fee for late reports or payments to Dq Treat, and factor these into their financial planning.