How is the interest rate determined on past due amounts 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's 2025 Franchise Disclosure Document, interest on past due amounts is determined by the highest rate permitted by applicable law. However, if there is no such legally defined rate, the interest will be 4% above the prime rate of interest identified by Citibank, N.A. in New York City.
This interest applies to all amounts in arrears, accruing from the first day of each month that the amount is past due. This condition applies to all past due amounts, including fees that were not timely reported, 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 pay fees on time can result in significant additional costs due to the interest charges. It is crucial to maintain timely and accurate reporting of gross revenues and to ensure all payments are made on schedule to avoid these interest penalties. Franchisees should be aware of both the legally permissible maximum interest rate in their jurisdiction and the Citibank, N.A. prime rate to understand the potential interest charges on overdue amounts.