What is the maximum 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 on overdue amounts is 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. For franchisees operating in California, the highest interest rate allowed by law for late payments is 10% annually.
This means that if a Mr. Sandless franchisee is late on payments, they will be charged interest on the overdue amount. The interest rate will either be 18% per year, or the maximum legal rate for commercial transactions in their state, whichever is lower. In California, the maximum interest rate Mr. Sandless can charge is capped at 10% annually due to state law.
It is important for prospective franchisees to be aware of these interest charges, as they can add up quickly if payments are consistently late. Franchisees should ensure they have sufficient cash flow to make timely payments to avoid incurring these charges. Understanding the specific regulations in their state, like the 10% cap in California, is also crucial for financial planning.