What late fee will Exit Franchisees pay on late payments?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
eement between them. Continuing Fees shall be paid by electronic bank transfer or by such means as Subfranchisor and EXIT may direct.
7.2. Interest, Late Charges and Overdue Amounts
Franchisee shall pay Subfranchisor and EXIT, as applicable, interest at the annual rate equal to the Prime Rate published from time to time in the Money Rates section of the Wall Street Journal plus five percent (5%), on all amounts due under this Agreement that are more than thirty (30) days late. Franchisee shall also pay Subfranchisor and EXIT, as applicable, a late fee of five percent (5%) of the amount of the late payment, if a payment is late. In addition to the foregoing, Franchisee shall pay to EXIT Twenty-Five Dollars ($25.00) for each of Franchisee's chec
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, if a franchisee's payment is late, they will be charged a late fee of 5% of the amount that was overdue. In addition to the late fee, Exit franchisees will be charged interest on all amounts due under the agreement that are more than 30 days late. The interest rate is calculated as the Prime Rate published in the Wall Street Journal plus 5%.
Furthermore, Exit franchisees will incur a $25 fee for any check that is returned or not honored by their bank, covering Exit's direct and indirect costs associated with the returned check. A $25 fee will also apply for any electronic ACH failures.
These late fee and interest charge policies are fairly standard in franchising, designed to encourage timely payments. Franchisees should ensure they understand the payment terms and due dates outlined in their agreement to avoid these additional costs. Setting up automatic payments may be a useful strategy to prevent late fees.