For Buff City Soap franchises in Maryland, when is the payment of the Initial Franchise/Development Fees due?
Buff_City_Soap 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.
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/Development Fees will be deferred. This means that a new Buff City Soap franchisee in Maryland will not be required to pay these fees until Buff City Soap has fulfilled its initial obligations to the franchisee. Furthermore, the franchisee must have commenced doing business before the fees are due. This financial assurance requirement was mandated by the Maryland Office of the Attorney General Securities Division due to Buff City Soap's financial condition.
This amendment to Item 5 of the disclosure document provides a significant benefit to prospective Buff City Soap franchisees in Maryland. By deferring the payment of the initial fees, it reduces the upfront financial burden on the franchisee and aligns the payment with the commencement of business operations. This can be particularly helpful for franchisees who may be concerned about the financial stability of Buff City Soap, as indicated by the Attorney General's requirement.
It is important for potential Buff City Soap franchisees in Maryland to understand the specific initial obligations that Buff City Soap must fulfill before the fees become due. These obligations should be clearly outlined in the franchise agreement. Franchisees should also be aware that this deferral is a result of the franchisor's financial condition, which may warrant further investigation into the company's financial health and stability before investing in a franchise.