What is the maximum interest rate Dryer Vent Squad can charge on overdue amounts?
Dryer_Vent_Squad Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of (Note 1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Interest | 18% per annum from due date | On demand | Payable on all overdue amounts, fees, charges, and payments due under the Franchise Agreement. Interest rate cannot exceed legal rate allowed by law and may be adjusted to reflect same. |
Source: Item 6 — OTHER FEES (FDD pages 16–21)
What This Means (2024 FDD)
According to Dryer Vent Squad's 2024 Franchise Disclosure Document, franchisees may be charged interest on all overdue amounts, fees, charges, and payments due under the Franchise Agreement. The interest rate is 18% per annum from the due date.
However, the interest rate cannot exceed the legal rate allowed by law and may be adjusted to reflect the legal rate. This means that while Dryer Vent Squad's standard policy is to charge 18% annually, they must comply with any state or local laws that set a lower maximum interest rate.
This is a fairly standard practice in franchising, where franchisors charge interest on overdue payments to encourage timely payments and to compensate for the administrative costs and potential financial losses associated with collecting late payments. Prospective Dryer Vent Squad franchisees should be aware of this policy and ensure they understand the payment terms outlined in the Franchise Agreement to avoid incurring interest charges.