What is the interest rate applied to late fees for Fly To Fit franchisees?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Late fee | $100 plus interest on the unpaid amount at a rate equal to 18% per year (or, if such payment exceeds the maximum allowed by law, then interest at the highest rate allowed by law) | On demand | We may charge a late fee if you fail to make a required payment when due. |
Source: Item 6 — OTHER FEES (FDD pages 12–16)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, a late fee of $100 will be applied to any required payment not made on time. In addition to the $100, interest will accrue on the unpaid amount at a rate of 18% per year. However, the FDD specifies that if this interest rate exceeds the maximum rate allowed by law, the interest rate will be the highest rate legally permitted. This late fee is charged on demand.
This means that if a Fly To Fit franchisee is late on a payment, they will incur an immediate $100 fee, plus ongoing interest charges on the outstanding balance. The interest continues to accumulate until the payment is made. The clause addressing the maximum legal interest rate protects the franchisee from potentially usurious rates if state laws have lower limits than the stated 18%.
Franchisees should be aware of the due dates for all payments to avoid these charges. It is also important to understand the legal interest rate limits in their specific state to ensure they are not overcharged. Paying close attention to payment schedules and maintaining sufficient funds can help Fly To Fit franchisees avoid these additional costs.