How much is the late fee charged by Ella Cafe for late payments?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
the last Gross Sales reported to Franchisor, and the parties will true-up the actual fees after Franchisee reports Gross Sales. Franchisee acknowledges that Franchisor 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 rate equal to 18% per year (or, if such payment exceeds the maximum allowed by law, then interest at the highest rate allowed by law).
- (d) Insufficient Funds. Franchisor may charge $30 for any payment returned for insufficient fund
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, if a franchisee fails to make payments on time, they will incur a late fee of $100, in addition to interest on the unpaid amount. The interest rate is set at 18% per year, or the highest rate permitted by law if the 18% exceeds legal limits.
This policy ensures that Ella Cafe franchisees are incentivized to make timely payments. The flat $100 late fee provides a clear, immediate penalty for late payments, while the accruing interest at 18% per year acts as a further deterrent, increasing the cost of delayed payment over time. Franchisees need to be aware of these financial implications and manage their cash flow effectively to avoid these charges.
Additionally, Ella Cafe has the right to charge $30 for any payment that is returned due to insufficient funds, unless the legal maximum is lower. The franchisee is also responsible for covering any costs Ella Cafe incurs while trying to collect overdue payments, including reasonable attorney fees. These terms highlight the importance of maintaining sufficient funds and adhering to the payment schedule to avoid additional expenses and potential legal issues.