In Virginia, when can Buns On Fire collect the initial franchise fee from a franchisee?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
VIRGINIA ADDENDUM TO FRANCHISE AGREEMENT
Notwithstanding anything to the contrary set forth in the Franchise Agreement, the following provision shall supersede and apply:
- Section 4.01 of the Franchisee Agreement shall be amended to add the following language:
"The Virginia State Corporation Commission's Division of Securities and Retail Franchising requires us to defer payment of the initial franchise fee and other initial payments owed by franchisees to the franchisor until the franchisor has completed its pre-opening obligations under the franchise agreement."
Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
According to the 2025 Buns On Fire Franchise Disclosure Document, the collection of the initial franchise fee in Virginia is subject to specific regulations. The Virginia State Corporation Commission's Division of Securities and Retail Franchising mandates that Buns On Fire must defer payment of the initial franchise fee and any other initial payments from franchisees until Buns On Fire has fulfilled all of its pre-opening obligations as outlined in the franchise agreement.
This requirement means that a prospective Buns On Fire franchisee in Virginia will not be required to pay the initial franchise fee upfront. Instead, the fee becomes due only after Buns On Fire has completed its responsibilities related to setting up the franchise location. These pre-opening obligations typically include site selection assistance, training, providing operations manuals, and other forms of support necessary to get the franchise ready for business.
For a potential franchisee, this deferral of the initial franchise fee offers a significant financial advantage. It reduces the initial investment required and aligns the payment of the fee with the franchisor's performance in providing the necessary support. This arrangement can also provide some assurance that Buns On Fire is committed to fulfilling its obligations before receiving the franchise fee. Franchisees should carefully review the franchise agreement to understand the specific pre-opening obligations that Buns On Fire must complete before the initial franchise fee becomes due.