What is the alternative interest rate Mr. Sandless can charge on overdue amounts?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Interest on Overdue Amounts | 18% per annum or the highest lawful interest rate for commercial transactions, whichever is less | As incurred | See Note 3. Interest accrues from the original due date until payment is made in full |
Note 3 – Interest Rate. In California, the highest interest rate allowed by law for late payments is 10% annually.
Source: Item 6 — OTHER FEES (FDD pages 10–13)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, the interest rate charged on overdue amounts is 18% per annum or the highest lawful interest rate for commercial transactions, whichever is less. This means that if a franchisee fails to make a payment on time, Mr. Sandless has the right to charge interest on the outstanding balance. The interest accrues from the original due date until the payment is made in full.
For franchisees operating in California, the FDD specifies that the highest interest rate allowed by law for late payments is 10% annually. Therefore, for California-based Mr. Sandless franchisees, the maximum interest rate that can be charged on overdue amounts is capped at 10%, even if the standard rate is higher.
This policy ensures that Mr. Sandless complies with state-specific regulations regarding interest rates while also providing a mechanism to recoup losses incurred due to late payments. Prospective franchisees should be aware of this interest rate policy and ensure timely payments to avoid incurring these charges. It is also important to note that the interest rate policy is subject to change based on updates to state laws or amendments to the franchise agreement.