How does Petro Stopping Center determine the interest rate on its promissory notes?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
- 9.11 Interest on Late Payments.
All amounts which you owe us, including but not limited to all amounts due under this Agreement or under any other agreement between us or our Affiliates and you, will bear interest automatically and without notice from us, after their due date at the annual rate of eighteen 18% or the highest contract rate of interest permitted by law, whichever is less.
You acknowledge that we do not agree to accept any payments after they are due nor commit to extend credit to, or otherwise finance your operation of, the Petro Center.
Your failure to pay all amounts when due constitutes grounds for termination of this Agreement.
- 9.12 Application of Payments.
Notwithstanding any designation you might make, we have sole discretion to apply any of your payments to any of your past due indebtedness to us, including interest.
- 9.13 Payment Offsets.
We may setoff from any amounts that we may owe you any amount that you owe to us, or our Affiliates, for any reason whatsoever, including without
limitation, Royalties, Monthly Advertising Fees, and late payment interest, amounts owed to us or our Affiliates for purchases of Products or Services, or for any other reason.
Payments that we make to you may be reduced, in our discretion, by amounts that you owe to us or our Affiliates from time to time.
In particular, we may retain (or direct to our Affiliates) any amounts that we have received for your account as a credit and payment against any amounts that you may owe to us, or our Affiliates, at any time.
We may do so without notice to you at any time.
Source: Item 14 — Other investments (FDD pages 131–208)
What This Means (2025 FDD)
According to the 2025 Petro Stopping Center Franchise Disclosure Document, the interest rate on late payments is determined by the following criteria. All amounts owed to Petro Stopping Center will bear interest automatically from the due date. The annual interest rate will be either 18% or the highest contract rate of interest permitted by law, whichever is less.
Petro Stopping Center retains sole discretion to apply payments to any past due indebtedness, including interest, regardless of any designation the franchisee might make. Petro Stopping Center may also offset any amounts owed to the franchisee by any amount the franchisee owes to them or their affiliates, including royalties, monthly advertising fees, and late payment interest.
This policy underscores the importance of timely payments to Petro Stopping Center to avoid incurring interest charges. Franchisees should be aware of the potential for Petro Stopping Center to offset payments and apply them to outstanding debts, which could impact their cash flow. The interest rate applied will be the lower of 18% or the maximum legal rate, which provides some protection against excessively high-interest charges but still represents a significant cost for late payments.