What is the maximum interest rate Pump It Up can charge?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Interest (1) | 1.5% per month or the highest commercial contract interest rate the law allows, whichever is less. | Upon demand. | We will debit interest from your business checking account on all past due amounts as of the original due date. |
Source: Item 6 — OTHER FEES (FDD pages 15–21)
What This Means (2025 FDD)
According to Pump It Up's 2025 Franchise Disclosure Document, if a franchisee has past due amounts, Pump It Up can charge interest. The interest will be the lesser of 1.5% per month or the highest commercial contract interest rate the law allows. This interest is debited from the franchisee's business checking account as of the original due date.
For a prospective Pump It Up franchisee, this means that failing to make timely payments can result in significant interest charges. While 1.5% per month may seem small, it equates to an annual interest rate of 18%, which is substantially higher than many commercial loan rates. Franchisees should prioritize timely payments to avoid these charges.
It's also important to note that the interest rate is subject to legal limits, meaning that if state law caps commercial interest rates below 1.5% per month, Pump It Up will only be able to charge the legally permissible rate. Franchisees should be aware of the commercial contract interest rate laws in their specific state to understand the maximum interest Pump It Up could potentially charge.