What is the condition that triggers the payment of the Development Fee for Churchs Chicken franchisees in Maryland?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
The following paragraph is added at the end of Item 5:
The Maryland Securities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until the franchisor completes its pre-opening obligations under the franchise agreement. In addition, all development fees and initial payments by area developers shall be deferred until the first franchise under the development agreement opens.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 50–55)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, Maryland franchisees do not pay development fees or initial payments until the first franchise under the development agreement opens. This is due to a financial assurance required by the Maryland Securities Commissioner. This deferral of fees provides a significant benefit to new Churchs Chicken franchisees in Maryland, as it reduces their upfront financial burden.
Typically, franchise development fees are paid upon signing the development agreement, regardless of when the store actually opens. This requirement in Maryland provides a safety net for franchisees, ensuring that they only pay these fees once the business is closer to generating revenue. This could be particularly helpful in managing cash flow during the initial setup phase.
This condition is specific to Maryland due to the state's franchise regulations and the intervention of the Maryland Securities Commissioner. Prospective Churchs Chicken franchisees in other states may not receive the same benefit and should be prepared to pay development fees upfront as outlined in their respective franchise agreements.