Under Maryland law, when is the initial franchise fee due to Augusta Lawn Care?
Augusta_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
As to franchises governed by the Maryland Franchise Registration and Disclosure Law, if any of the terms of the Disclosure Document are inconsistent with the terms below, the terms below control.
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- The Office of the Attorney General of the State of Maryland requires us to defer payment of the initial franchise fee and other initial payments owed by Franchisee to Augusta Lawn Care under until Augusta Lawn Care has completed its pre-opening obligations under the Agreement, and Franchisee has commenced operations. Therefore, and notwithstanding Section 6.1, Section 6.2, or any other provision of the Agreement, all initial fees will be deferred until after Augusta Lawn Care's initial obligations to Franchisee are complete, and Franchisee has commenced operations.
Source: Item 23 — RECEIPTS (FDD pages 44–184)
What This Means (2025 FDD)
According to the 2025 FDD, Maryland franchise law dictates when Augusta Lawn Care can collect the initial franchise fee from franchisees in that state. Specifically, the initial franchise fee is deferred until Augusta Lawn Care has completed all of its pre-opening obligations as outlined in the Franchise Agreement. Furthermore, the franchisee must have commenced operations before the initial fee is due. This requirement supersedes any conflicting terms in Sections 6.1 and 6.2, or any other part of the standard Franchise Agreement.
This amendment to the franchise agreement is designed to protect prospective franchisees in Maryland. By deferring the initial franchise fee, Augusta Lawn Care assumes more of the initial risk. The franchisee is not obligated to pay the fee until the franchisor has fulfilled their pre-opening responsibilities and the franchisee has started their business operations. This ensures that franchisees are not paying for services or support that they have not yet received.
For a prospective Augusta Lawn Care franchisee in Maryland, this deferral provides a significant financial benefit. It allows them to allocate their initial capital towards setting up the business and commencing operations, rather than immediately paying the franchise fee. This can improve their cash flow during the critical early stages of the business. Franchisees should confirm with Augusta Lawn Care what specific actions constitute fulfillment of pre-opening obligations and what documentation is required to demonstrate commencement of operations to ensure compliance with Maryland law.