Why has the Department determined that All County is not adequately capitalized?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
This Addendum pertains to franchises sold in the State of California and is for the purpose of complying with California statutes and regulations. Notwithstanding anything which may be contained in the body of the Franchise Agreement to the contrary, the Agreement is amended to include the following:
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- The Department has determined that we, the franchisor, have not demonstrated we are adequately capitalized and/or that we must rely on franchise fees to fund our operations. The Commissioner has imposed a fee deferral condition, which requires that we defer the collection of all initial fees from California franchisees until we have completed all of our pre-opening obligations and you are open for business.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to All County's 2025 Franchise Disclosure Document, the Department (likely referring to a state regulatory agency in California) has determined that All County has not demonstrated adequate capitalization. This means All County may not have sufficient financial resources to meet its obligations and support its operations effectively. The Department also believes that All County may be relying on franchise fees to fund its operations.
As a result of this determination, the Commissioner has imposed a fee deferral condition for All County franchises sold in California. This condition requires All County to defer the collection of all initial franchise fees from California franchisees. All County cannot collect these fees until it has completed all of its pre-opening obligations to the franchisee, and the franchisee is open for business.
This fee deferral is designed to protect California franchisees. It ensures that All County fulfills its initial obligations before receiving the franchise fee. For prospective franchisees in California, this means they will not have to pay the initial franchise fee upfront. Instead, they will pay it after All County has provided the necessary support and the franchise is ready to open. This arrangement reduces the financial risk for new franchisees, as they are not investing in a franchise that may not be adequately supported by the franchisor.