For a Stretch Zone franchise, what is the interest rate charged on overdue payments?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
a bank for the Franchise Business. You will make all Royalty Fees, Technology Fees and Media Fund contributions and other invoices due us and our Affiliates from remittances from your members that have been deposited into your operating account by ClubReady processing payments due us (the "Payment System"). You will cooperate with us to implement the Payment System within 15 days before the Opening Date. You agree to cooperate with us in maintaining the efficient operation of the Payment System including depositing all Gross Revenues you receive into your operating account within 1 Business Day of receipt. You cannot initiate payments through the ClubReady Electronic Payment System, but we are able to initiate payments through the ClubReady Electronic Payment System for invoices that are due us.
Section 3.4 INTEREST ON LATE PAYMENTS; LATE CHARGE
(a) Interest. If any payment under this Agreement or any other agreement between us or our Affiliates and you for your Franchise Business is overdue for any reason, you must pay to us, on demand, in addition to the overdue amount, any insufficient funds (NSF) charges we incur and interest on the overdue amount from the date it was due until paid equal to the lesser of: (i) 18% per annum; or (i
Source: Item 8 — Receipts. Any sale made must be in compliance with § 683(8) of the Franchise Sale Act (N.Y. Gen. Bus. L. § 680 et seq.), which describes the time period a Franchise Disclosure Document (offering prospectus) must be provided to a prospective franchisee before a sale may be made. New York law requires a franchisor to provide the Franchise Disclosure Document at the earliest of the first personal meeting or ten (10) business days before the execution of the franchise or other agreement or the payment of any consideration that relates to the franchise relationship. (FDD pages 99–263)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, if a franchisee's payment is overdue, Stretch Zone will charge interest on the overdue amount. The interest will be calculated from the date the payment was due until it is paid. The annual interest rate will be the lesser of 18% or the maximum rate of interest permitted by law.
In addition to interest on overdue amounts, Stretch Zone also charges a $100 late fee for each overdue payment. If a franchisee's check is returned due to insufficient funds, Stretch Zone may assess a service charge of $50 or 5% of the check's face value, whichever is greater, but limited to the highest amount permitted by law.
Stretch Zone retains the sole discretion to apply any payments received from the franchisee to any outstanding debts. This includes royalty fees, training fees, technology fees, advertising contributions, purchases from Stretch Zone or its affiliates, interest, NSF charges, or any other form of debt the franchisee owes to Stretch Zone or its affiliates. This application of payments can be done in any manner Stretch Zone chooses, regardless of any designation the franchisee might make.