How many days late does a payment have to be before interest is charged to an Exit Franchisee?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, interest will be charged on all amounts due that are more than thirty (30) days late. The interest rate is calculated as the Prime Rate published in the Wall Street Journal's Money Rates section, plus an additional five percent (5%).
In addition to interest, Exit franchisees will also be charged a late fee. This fee is five percent (5%) of the amount of the late payment. This means that if a franchisee is late on a $1,000 payment, they will be charged a $50 late fee, in addition to the interest accrued after 30 days.
It is important for prospective Exit franchisees to understand these payment terms and ensure they have sufficient cash flow to make timely payments. Failure to do so can result in significant additional costs in the form of interest and late fees. Franchisees should also be aware of the potential impact of late payments on their relationship with Exit.