What is the interest rate charged on past due amounts for a Moes Southwest Grill franchise?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
You must pay us interest on amounts not paid on time at the rate of 1.5% per month or portion of a month, but not more than the maximum interest rate permitted by applicable laws.
- 3.6 Late Reporting Fee.
If you fail to submit timely, complete, and accurate reports, financial statements, tax returns, and statements of initial investment costs in accordance with Sections 14.3 (Systems and Reports), 14.4 (Financial Statements), 14.5 (Tax Returns), and 14.7 (Initial Investment Statements), we may charge you our then-current late fee (the "Late Reporting Fee").
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
According to the 2025 Moe's Southwest Grill Franchise Disclosure Document, franchisees must pay interest on any amounts that are not paid on time. This interest accrues at a rate of 1.5% per month, or for any portion of a month that the payment is late. However, the interest rate will not exceed the maximum interest rate permitted by applicable laws.
This means that if a franchisee fails to make a payment on time, they will be charged interest on the outstanding balance. The 1.5% monthly interest rate can add up quickly, so it is important for franchisees to make payments on time to avoid incurring these charges. For example, an unpaid balance of $1,000 would accrue $15 in interest for each month it remains unpaid, in addition to any principal owed.
Franchisees should be aware of this interest rate and factor it into their financial planning. It is also important to understand the applicable laws in their jurisdiction, as the maximum permissible interest rate may vary. By staying on top of payments and understanding the terms of the franchise agreement, franchisees can avoid these additional costs and maintain a healthy financial standing with Moe's Southwest Grill.