For Buff City Soap franchisees in Maryland, when will the payment of the initial franchise/development fees be deferred?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
FOR THE STATE OF MARYLAND
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.
Item 5 is amended to provide as follows: "Payment of Initial Franchise/Development Fees will be deferred until Franchisor has met its initial obligations to franchisee, and franchisee has commenced doing business.
This financial assurance requirement was imposed by the Maryland Office of the Attorney General Securities Division due to Franchisor's financial condition."
Source: Item 17 — (r) is amended subject to Indiana Code 23-2-2.7-1(9) to provide that the post-term noncompetition covenant shall have a geographical limitation of the territory granted to Franchisee. (FDD pages 210–216)
What This Means (2025 FDD)
According to the 2025 Buff City Soap Franchise Disclosure Document, for franchises governed by the Maryland Franchise Registration and Disclosure Law, the payment of initial franchise and development fees will be deferred. Specifically, these fees are not due until Buff City Soap has fulfilled its initial obligations to the franchisee and the franchisee has commenced doing business. This amendment to Item 5 of the FDD is a result of a financial assurance requirement imposed by the Maryland Office of the Attorney General Securities Division due to Buff City Soap's financial condition.
This deferral provides a significant benefit to prospective Buff City Soap franchisees in Maryland. It alleviates some of the upfront financial burden, allowing the franchisee to delay payment until the franchisor has met its pre-opening obligations and the business is actually up and running. This can be particularly helpful in managing cash flow during the initial stages of setting up the franchise.
It is important for potential Buff City Soap franchisees in Maryland to understand the specific pre-opening obligations that Buff City Soap must fulfill before the initial fees become due. These obligations are outlined in the franchise agreement, and franchisees should carefully review them to ensure they are met in a timely manner. This deferral is a direct result of the franchisor's financial condition, so prospective franchisees should conduct thorough due diligence to fully understand the implications.