What are the consequences for 'LATE PAYMENTS/INSUFFICIENT FUNDS' as outlined in the Extreme Art Studio Franchise Agreement?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
ed account are greater than the amounts you actually owe us, we will credit the excess against the amounts we otherwise would debit from your designated account on the next payment due date.
3.10 LATE PAYMENTS/INSUFFICIENT FUNDS.
- 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.
- 3.10.2 If any check or EFT payment from you to u
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, late payments or payments with insufficient funds can result in specific financial penalties. Any payment not made by the due date is considered overdue, and Extreme Art Studio will charge interest on the overdue amount. This interest accrues from the date the payment was due until it is paid, at a rate of the lesser of 18% per year or the highest amount allowed by law. This interest charge is in addition to any other legal or equitable remedies that Extreme Art Studio may pursue. Extreme Art Studio has the right to debit the franchisee's bank account or deduct from any amounts it owes to the franchisee to cover these service charges and interest.
Additionally, if a check or electronic funds transfer (EFT) payment is unsuccessful due to insufficient funds, a stop payment, or a similar event, Extreme Art Studio will charge a non-sufficient funds fee of $100 per incident. This fee is payable upon demand.
It is important to note that these stipulations do not obligate Extreme Art Studio to accept late payments or extend credit to the franchisee. Franchisees should ensure timely payments to avoid these penalties and maintain a good financial standing with Extreme Art Studio.