In California, what is the highest interest rate permitted by law?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
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- The highest interest rate permitted by law in California is ten percent (10%).
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- California's Franchise Investment Law (Corporations Code sections 31512 and 31512.1) states that any provision of a franchise agreement or related document requiring the franchisee to waive specific provisions of the law is contrary to public policy and is void and unenforceable. The law also prohibits a franchisor from disclaiming or denying (i) representations it, its employees, or its agents make to you, (ii) your ability to rely on any representations it makes to you, or (iii) any violations of the law.
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- No statement, questionnaire, or acknowledgement signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to the 2025 Learningrx Franchise Disclosure Document, the highest interest rate permitted by law in California is ten percent (10%). This information is crucial for prospective franchisees in California to understand their rights and obligations regarding financial matters.
This disclosure is important because it sets a legal limit on the interest rate that Learningrx can charge a franchisee for late payments or returned payments due to insufficient funds. Should a franchisee encounter difficulties in making timely payments, the interest charged cannot exceed this legal maximum.
Furthermore, the Learningrx FDD emphasizes the importance of franchisees understanding California's Franchise Investment Law, which protects franchisees from waiving specific legal rights. It also clarifies that Learningrx cannot deny representations made to franchisees or disclaim responsibility for violations of the law. This ensures that franchisees are aware of their legal protections and the franchisor's obligations under California law.