What is deferred until Capriottis Sandwich Shop fulfills its initial obligations?
Capriottis_Sandwich_Shop Franchise · 2025 FDDAnswer from 2025 FDD Document
Despite the payment provisions above, we will defer your payment of the initial franchise fee due under the Franchise Agreement until we have fulfilled all of our initial obligations to you under the Franchise Agreement and you have opened your Restaurant for business. You must pay us the initial franchise fee on the day you open your Restaurant for business.
Despite the payment provisions above, we will defer your payment of the development fee due under the Development Rights Agreement until we have fulfilled all of our initial obligations to you and you have opened your first CAPRIOTTI'S Restaurant for business. You must pay us the full development fee due under the Development Rights Agreement on the day you open your first CAPRIOTTI'S Restaurant for business.
Source: Item 23 — RECEIPTS (FDD pages 73–303)
What This Means (2025 FDD)
According to the 2025 Capriottis Sandwich Shop Franchise Disclosure Document, the payment of the initial franchise fee is deferred until Capriottis Sandwich Shop has fulfilled all of its initial obligations to the franchisee under the Franchise Agreement and the franchisee has opened their restaurant for business. The franchisee must pay the initial franchise fee on the day they open their restaurant. This deferred payment plan is applicable in several states, including Illinois, Minnesota, and North Dakota.
For franchisees entering into a Development Rights Agreement, the payment of the development fee is also deferred until Capriottis Sandwich Shop has fulfilled all of its initial obligations and the franchisee has opened their first Capriottis Sandwich Shop restaurant for business. The full development fee is due on the day the franchisee opens their first restaurant.
In Maryland, based on Capriottis Sandwich Shop's financial condition, the Maryland Securities Commissioner requires that all initial fees and payments be deferred until Capriottis Sandwich Shop completes its pre-opening obligations under the Franchise Agreement and the franchisee has opened their restaurant for business. Similarly, all development fees and initial payments by area developers are deferred until the developer has opened their first Capriottis Sandwich Shop restaurant. This requirement provides a level of financial assurance to franchisees in Maryland, ensuring that they do not pay fees until Capriottis Sandwich Shop has met its initial obligations.