What is the interest rate charged on past due amounts owed to Fitstop?
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 be charged interest on the overdue amount. The interest rate will be the highest rate allowed by law. However, if there is no maximum rate permitted by law, the interest rate will be 18% per year.
This interest is applied from the original due date until the payment is made. The interest is calculated using monthly compounding, based on the actual number of days elapsed divided by 365.
For a prospective Fitstop franchisee, this means that it is crucial to make all payments to Fitstop on time to avoid incurring interest charges. The 18% interest rate, or the highest rate allowed by law, could significantly increase the amount owed if payments are not made promptly. Franchisees should be aware of this policy and factor it into their financial planning to ensure they can meet their obligations to Fitstop.