What is the maximum interest rate that Engel & Volkers can charge on arrears?
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, the interest charged on overdue amounts is determined by applicable law. Specifically, Engel & Volkers can charge the highest interest rate permitted by applicable law. However, if there is no legally defined maximum rate, Engel & Volkers can charge an interest rate of 4% above the prime rate identified by Citibank, N.A. in New York City.
This means that if an Engel & Volkers franchisee fails to make timely payments, they will incur interest charges on the outstanding balance. The interest accrues from the first day of each month that the amount remains past due. This applies to all amounts in arrears, including fees that were not reported on time.
For a prospective Engel & Volkers franchisee, this highlights the importance of managing finances carefully and ensuring timely payments to avoid incurring interest charges. Franchisees should be aware of the applicable laws governing interest rates in their jurisdiction to understand the potential maximum interest that Engel & Volkers could charge. Keeping abreast of the Citibank, N.A. prime rate is also important in case no maximum rate is set by law.
It is also important to note that accurately and promptly reporting Gross Revenues is crucial. Failure to do so, or failure to pay Royalties and/or contributions to the National Marketing and Technology Fund when due, will result in a Royalty percentage of 6% on all of your Gross Revenues for the remainder of the term of your franchise agreement.