When does interest accrue on overdue amounts owed to Mr. Sandless?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee – Mr. Sandless Business | 6% of Gross Sales or $600, whichever is greater | No Royalty Fee for the first 3 months after opening, transfers not included. Then monthly, not later than the 15th day of each month | Royalties are payable on your Gross Sales for the previous calendar month. If the 15th day of any month is not a business day, then payment is due on the next business day. See Note 1. |
| Advertising Fund | 1% of Gross Sales | Payable at the same time and in the same manner as the Royalty Fee | You must contribute to our Advertising Fund (described in Item 11) |
| Required Minimum Expenditure for Local Marketing and Advertising | Minimum $1,500 per month. | As incurred. | Payable to third parties. All advertising must be pre-approved by us. See footnote 2. |
| Additional Territory Fee | $5,000 per 100,000 population | As incurred upon signing an Amendment to add Territory | If you meet our qualifications, you have the option to purchase additional territory to a maximum of 4 territories under your Franchise Agreement. |
| Surveys | $140 | On demand | If we conduct a customer satisfaction survey for your Business and the results of the survey are below our minimum standards, we have the right to bill you for the cost of the survey. Any survey costs paid by you are contributed to the Advertising Fund |
| Transfer Fee | $5,000 per Owner | Upon transfer | The transfer fee includes all franchise units you own. |
| Successor Agreement Fee | $1,000 per Business | Upon signing the Successor Franchise Agreement | The Successor Agreement Fee is per franchise unit you hold. |
| 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 |
Source: Item 6 — OTHER FEES (FDD pages 10–13)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, interest accrues on overdue amounts from the original due date until the payment is made in full. The interest rate is set at 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 to Mr. Sandless by the due date, interest charges will immediately begin to accumulate on the outstanding balance.
For a prospective Mr. Sandless franchisee, this highlights the importance of making timely payments to avoid incurring interest charges. The 18% annual interest rate, while potentially limited by state law, is a significant cost that can quickly add up, especially on larger overdue amounts. Franchisees should ensure they have systems in place to track due dates and make payments promptly to maintain a positive financial standing with Mr. Sandless.
It's also important to note that in California, the highest interest rate allowed by law for late payments is 10% annually. Therefore, if a Mr. Sandless franchise is located in California, the interest rate on overdue amounts would be capped at 10%, even though the standard rate listed in the franchise agreement is 18%. Franchisees should be aware of the specific regulations in their state regarding interest rates on commercial transactions to understand their obligations fully.