What is the maximum interest rate Hydrodog can charge on overdue amounts?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
| Name of Fee(1) | Amount(4) | Due Date | Remarks |
|---|---|---|---|
| Interest | 2% per month or maximum allowable by law. | As incurred | Payable on all overdue amounts. |
| Late Payment Fee | 10% of the amount due, or the maximum allowable by law | As incurred | Payable on all amounts paid after the date such payment is due. |
Source: Item 6 — OTHER FEES (FDD pages 12–16)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, Hydrodog can charge interest on overdue amounts. The interest will be either 2% per month or the maximum rate allowable by law. This interest is payable as incurred on all overdue amounts.
In practical terms, this means that if a Hydrodog franchisee fails to make timely payments to the franchisor, they will be subject to an interest charge. The specific interest rate will be the lesser of 2% per month (which equates to 24% annually) or the highest rate permitted by applicable state or federal law. This ensures that Hydrodog complies with usury laws, which set legal limits on interest rates.
Franchisees should be aware of this provision and ensure they make all payments on time to avoid incurring interest charges. It is also important to understand the usury laws in their specific jurisdiction to know the maximum interest rate that can legally be charged. This information is typically found in state statutes or by consulting with a legal professional.
Late fees and interest charges are standard practice in franchising to encourage timely payments and compensate the franchisor for the administrative costs and potential financial losses associated with overdue amounts. Franchisees should factor these potential costs into their financial planning and budgeting.