Does the obligation to pay amounts owed to Golden Krust Caribbean Restaurant include interest?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
All amounts which you owe us will bear interest after their due date at the rate of one and one-half percent (1.5%) per month or the highest contract rate of interest permitted by law, whichever is less. You acknowledge that this Section does not constitute our agreement to accept any payments after they are due or our commitment to extend credit to, or otherwise finance your operation of, the Restaurant. Your failure to pay all amounts when due constitutes default of this Agreement, as provided in Section XV hereof, notwithstanding the provisions of this Section.
Source: Item 22 — CONTRACTS (FDD page 35)
What This Means (2024 FDD)
According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, any amounts owed to the company will accrue interest if not paid on time. Specifically, the FDD states that overdue amounts will incur interest at a rate of 1.5% per month, or the highest contract rate of interest permitted by law, whichever is less.
This means that if a franchisee fails to make timely payments for royalties, supplies, or any other fees owed to Golden Krust Caribbean Restaurant, they will be charged interest on the outstanding balance. The interest will continue to accrue until the full amount, including the interest, is paid. The 1.5% monthly interest rate translates to an annual rate of 18%, which is a significant penalty for late payments.
The Franchise Disclosure Document also clarifies that the imposition of interest does not obligate Golden Krust Caribbean Restaurant to accept late payments or extend credit to the franchisee. Furthermore, failure to pay amounts when due constitutes a default of the Franchise Agreement, regardless of the interest charges. This highlights the importance of franchisees managing their finances carefully and ensuring timely payments to avoid penalties and potential breach of contract.