How is the interest on overdue amounts calculated for a Mr. Sandless franchise?
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 |
All of the above fees are nonrefundable unless otherwise stated. All of the above fees are payable to us, unless otherwise indicated in the chart. The fees outlined in this Item 6 are imposed uniformly on all franchisees.
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, interest on overdue amounts is charged at a rate of 18% per annum, or the highest lawful interest rate for commercial transactions, whichever is less. This interest accrues from the original due date until the payment is made in full. This fee applies uniformly to all Mr. Sandless franchisees.
For a prospective Mr. Sandless franchisee, this means that if any payments are not made on time, interest charges will immediately begin to accumulate. The interest rate will either be 18% annually or the maximum legal rate for commercial transactions, depending on which is lower. It is important to note that in California, the highest interest rate allowed by law for late payments is 10% annually.
Franchisees should be aware of these terms to avoid incurring additional costs. Paying all fees on time is crucial to avoid these interest charges. This is a fairly standard practice in franchising, as franchisors need to ensure timely payments to maintain their own financial stability and operational efficiency. Franchisees should factor in these potential costs when managing their finances and ensure they have a system in place to track and pay all dues promptly.