How is interest calculated on past due amounts for Fitstop franchisees?
Fitstop Franchise · 2024 FDDAnswer 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 have to pay interest on the overdue amount. This interest accrues from the original due date until the payment is made.
The annual interest rate applied to the past due amount will be the highest rate permitted by law. However, if there is no legally defined maximum rate, the interest rate will be 18% per annum.
The interest is calculated by compounding it monthly, using the actual number of days elapsed divided by 365 to determine the precise amount of interest owed. This compounding method means that interest accrues not only on the principal amount but also on the accumulated interest from previous months, potentially increasing the total amount owed over time.