What is the maximum interest rate that Extreme Art Studio charges on overdue amounts?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee(1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Interest | Lesser of the daily equivalent of 18% per year, or highest amount allowed by law | As incurred | Due on all overdue amounts and accruing as of the original due date. |
Source: Item 6 — OTHER FEES (FDD pages 13–18)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, if a franchisee has any overdue amounts, Extreme Art Studio charges interest. The interest rate is the lesser of either the daily equivalent of 18% per year or the highest amount allowed by law. This interest accrues as of the original due date of the unpaid amount.
For a prospective Extreme Art Studio franchisee, this means that it is crucial to pay all fees and other amounts owed to Extreme Art Studio on time to avoid incurring interest charges. The specific interest rate applied will depend on state and local laws, but it will not exceed 18% per year.
Franchisees should be aware that 'as incurred' is listed as the due date, meaning that interest charges will be applied immediately to any overdue amounts. This is a fairly standard practice in franchising, as franchisors need to ensure timely payments to maintain their own financial stability and provide consistent support to all franchisees.