factual

What is the compounding frequency for interest charged on past due amounts to Fitstop?

Q: What is the compounding frequency for interest charged on past due amounts to Fitstop?

- 13.11 **Interest on Past Amounts Due.** In the event that you are past due on the payment of any amount due to us under this Agreement, including accrued interest, you shall be required, to the extent permitted by law, to pay interest on the past due amount to us for the period beginning with the original due date for payment to the date of actual payment at an annual rate equal to the highest rate allowed by law or, if there is no maximum rate permitted by law, then 18% per annum. Such interest will be calculated on the basis of monthly compounding and the actual number of days elapsed divided by 365. Source: Item 23 — RECEIPTS (FDD pages 50–135)

Fitstop Franchise · 2024 FDD

Answer from 2024 FDD Document

13.11 Interest on Past Amounts Due. In the event that you are past due on the payment of any amount due to us under this Agreement, including accrued interest, you shall be required, to the extent permitted by law, to pay interest on the past due amount to us for the period beginning with the original due date for payment to the date of actual payment at an annual rate equal to the highest rate allowed by law or, if there is no maximum rate permitted by law, then 18% per annum.

Such interest will be calculated on the basis of monthly compounding and the actual number of days elapsed divided by 365.

Source: Item 23 — RECEIPTS (FDD pages 50–135)

What This Means (2024 FDD)

According to Fitstop's 2024 Franchise Disclosure Document, if a franchisee is late on any payments owed to Fitstop, they will be charged interest on the past due amount. This interest accrues from the original due date until the payment is made. The annual interest rate is the highest rate allowed by law, or if there is no maximum rate, it will be 18% per annum.

The interest is calculated using monthly compounding. This means that each month, the interest is calculated on the outstanding balance, and that interest is then added to the principal. The next month, interest is calculated on the new, higher principal amount, leading to a compounding effect. The calculation also considers the actual number of days elapsed divided by 365 to determine the precise interest amount for the period.

For a prospective Fitstop franchisee, this means that it is crucial to make all payments on time to avoid incurring interest charges. The monthly compounding of interest, even at a rate of 18% per annum (or the highest legally permissible rate), can significantly increase the amount owed over time. Franchisees should ensure they have sufficient financial resources and budgeting practices in place to meet all payment obligations to Fitstop promptly.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.

All Fitstop 2024 FAQs Ask FDD Ninja