What is the base interest rate used to calculate interest on arrears owed to Engel & Volkers?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Interest (See Note 1) | The highest rate permitted by applicable law, or if there is no such rate 4% above the prime rate of interest identified by Citibank, N.A. in New York City | On demand. | Payable on all amounts in arrears from the first day of each month that an amount is past due. For any fees that were not timely reported interest will be payable from the first day of each month that an amount is past due, should |
Source: Item 6 — OTHER FEES (FDD pages 22–30)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, if a franchisee owes money to Engel & Volkers and the payment is in arrears, interest will be charged on the past due amount. The interest rate is determined by the highest rate permitted by applicable law. However, if there is no legally defined maximum rate, the interest rate will be 4% above the prime rate identified by Citibank, N.A. in New York City.
This interest applies to all overdue amounts, calculated from the first day of each month that the amount remains unpaid. This also applies to fees that were not reported on time, with interest accruing from the first day of the month the amount was past due, even if the fees were eventually reported.
For a prospective Engel & Volkers franchisee, this means that failing to make timely payments or accurately report fees can result in significant additional costs due to the accrued interest. It is crucial to maintain accurate records and adhere to the payment schedule outlined in the Franchise Agreement to avoid these charges. Franchisees should be aware of both the legally permissible interest rates in their jurisdiction and the Citibank, N.A. prime rate to understand the potential financial implications of late payments.