What is the default interest rate charged on past due amounts owed to Itan?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
us an amount equal to all taxes levied or assessed against us based on goods or services you sell or goods or services we furnish to you, excluding income taxes imposed on us based on fees you pay us under this Agreement.
- 13.4. Due Date & Late Fee. Payments are due 10 days after invoicing unless otherwise specified. If any sum due under this Agreement is not received by us when due or there are insufficient funds in your Account to cover the sum when due, then in addition to this sum you must pay us $100 plus default interest on the amount past due at a rate equal to the lesser of 18% per annum (pro-rated on a daily basis) or the highest rate permitted by applicable Law. We will not impose a late fee for any amount paid pursuant to §13.5 if, but only to the extent that, sufficient funds were available in your Account to be applied towards the p
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, if a franchisee fails to make payments on time, Itan may charge default interest on the past due amount. This interest rate is the lesser of 18% per annum, prorated daily, or the highest rate permitted by applicable law. In addition to default interest, Itan may also charge a $100 fee if there are insufficient funds in the franchisee's account to cover the amount owed or if a check is returned due to insufficient funds.
It is important to note that Itan will not impose a late fee for any amount paid pursuant to section 13.5 if sufficient funds were available in the franchisee's account to cover the payment when due. However, if Itan cannot determine the amount due because the franchisee fails to record sales or submit gross sales reports in a timely manner, Itan may assess a late fee on the entire amount that was due.
This policy is fairly standard in franchising, as franchisors need to ensure timely payments from franchisees to maintain their own financial stability. The 18% interest rate, while potentially high, is capped at the maximum legal rate, providing some protection for the franchisee. Franchisees should ensure they have a system in place for accurate and timely sales reporting and payment processing to avoid these late fees and interest charges.