What is the interest rate charged on late payments to Floors To Go?
Floors_To_Go Franchise · 2025 FDDAnswer from 2025 FDD Document
Any interest rate charged to a California franchisee shall comply with the California Constitution. The interest rate shall not exceed either (a) 10% annually or (b) 5% annually plus the prevailing interest rate charged to banks by the Federal Reserve Bank of San Francisco, whichever is higher.
Source: Item 23 — RECEIPTS (FDD pages 47–204)
What This Means (2025 FDD)
According to Floors To Go's 2025 Franchise Disclosure Document, the interest rate charged to a California franchisee on late payments must comply with the California Constitution. Specifically, the interest rate cannot exceed the greater of either 10% annually or 5% annually plus the prevailing interest rate charged to banks by the Federal Reserve Bank of San Francisco.
This disclosure is specific to California due to the state's franchise investment laws. It ensures that Floors To Go franchisees in California are not subjected to excessive interest rates on late payments, aligning with the state's regulations.
Prospective franchisees should be aware of these stipulations, especially if they plan to operate in California, to understand their rights and obligations regarding payment terms and potential late fees. Franchisees operating outside of California should consult their specific franchise agreement and local laws to determine the interest rate charged on late payments.