What is the franchisor's responsibility regarding pre-opening obligations to All County franchisees in California?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
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 franchisor has specific responsibilities regarding pre-opening obligations to franchisees in California. The California Department of Financial Protection and Innovation has determined that All County has not demonstrated adequate capitalization and/or relies on franchise fees to fund its operations. As a result, the Commissioner has imposed a fee deferral condition.
This condition mandates that All County must defer the collection of all initial franchise fees from California franchisees. This deferral remains in effect until All County has fulfilled all of its pre-opening obligations to the franchisee. Furthermore, the franchisee must be open for business before All County can collect these initial fees.
This requirement protects new All County franchisees in California by ensuring that the franchisor completes its pre-opening support and obligations before receiving the initial franchise fee. It also shifts some of the initial financial risk from the franchisee to the franchisor, as All County must invest in setting up the franchisee's business before receiving payment. Prospective franchisees should confirm exactly what constitutes 'pre-opening obligations' to ensure clarity on what All County must deliver prior to fee collection.