What is the annual simple interest rate charged on overdue payments to Extreme Art Studio?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
- 3.10.1 Any payment not made by the due date will be deemed overdue. In the event of any overdue amounts, you will pay us, in addition to the overdue amounts, interest on such amounts from the date such amounts were due until paid at the lesser of the daily equivalent of eighteen percent (18%) per year simple interest or the highest amount allowed under law. Such interest will be in addition to any other remedies we may have under law or equity. We may debit your bank account automatically, or deduct from amounts we owe you, for service charges and interest. You acknowledge this Section is not our agreement to accept any payments after they are due or our commitment to extend credit to, or otherwise finance your operation of, the Extreme Art Studio Franchise.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, any payment not made by the due date is considered overdue. In the event of overdue amounts, Extreme Art Studio will charge interest on those amounts from the date they were due until paid. The annual simple interest rate charged will be the lesser of 18% or the highest amount allowed under law.
This means that if an Extreme Art Studio franchisee fails to make a payment on time, they will incur interest charges on the outstanding balance. The interest will accrue from the original due date until the payment is made. The specific interest rate will depend on the applicable legal limits, but it will not exceed 18% per year.
In addition to interest, Extreme Art Studio may also debit the franchisee's bank account automatically or deduct from amounts they owe the franchisee for service charges and interest. The FDD also states that this late payment policy does not obligate Extreme Art Studio to accept late payments or extend credit to the franchisee.