What interest rate applies to late payments owed to Hyatt by The Standardx franchisees?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
agreement to accept any payments after they are due or Hyatt's commitment to extend credit to, or otherwise finance Franchisee's operation of, the Hotel.
- 6.6 Application of Payments. Despite any designation Franchisee makes, Hyatt may apply any of Franchisee's payments to any of Franchisee's past due indebtedness to Hyatt or its Affiliates. Hyatt may set off any amounts Franchisee or its Affiliates owe Hyatt or its Affiliates against any amounts that Hyatt or its Affiliates owe Franchisee or its Affiliates. Franchisee may not withhold payment of any amounts Franchisee owes Hyatt or its Affiliates due to Hyatt's alleged nonperformance of any of its obligations under this Agreement.
- 6.7 Taxes on Franchisee's Payments. In addition to any sales, use and other taxes that applicable law requires or permits Hyatt to collect from Franchisee for providing goods or services under this Agreement, Franchisee shall pay to Hyatt all Transaction Taxes in an amount necessary to provide Hyatt with after-tax receipts
Source: Item 18 — OTHER INCOME (LOSS), NET (FDD pages 187–399)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, franchisees who fail to make payments on time to Hyatt are subject to interest on the overdue amount. Specifically, any amounts owed to Hyatt that remain unpaid for more than seven days will accrue interest from the original due date.
The interest rate applied to these late payments is 1.5% per month. However, the agreement specifies a condition: if the highest commercial contract interest rate allowed by law is lower than 1.5% per month, then that lower legal rate will be applied instead. This ensures that the interest charged on late payments does not exceed the maximum rate permitted by applicable law.
In addition to the interest on late payments, The Standardx franchisees also have to pay a late fee of $225 for each payment not made on time. This late fee and the interest charge are intended to compensate Hyatt for the increased administrative and management costs associated with handling late payments, and it's not an agreement to accept late payments.