In Maryland, when are initial fees and payments owed by Churchs Chicken franchisees deferred until?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
In recognition of the requirements of the Maryland Franchise Registration and Disclosure Law, the Cajun Global LLC Franchise Disclosure Document for the offer of Church's Texas Chicken franchises for use in the State of Maryland shall be amended to include the following:
- 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, the Maryland Securities Commissioner requires a financial assurance for franchises in Maryland. As a result, all initial fees and payments owed by Churchs Chicken franchisees in Maryland are deferred until Churchs Chicken completes its pre-opening obligations under the franchise agreement. This means a new franchisee in Maryland won't have to pay the initial franchise fee until Churchs Chicken has fulfilled its responsibilities, such as providing training, site selection assistance, and other support outlined in the franchise agreement.
For area developers in Maryland, all development fees and initial payments are deferred until the first Churchs Chicken franchise under the development agreement opens. This provides a significant benefit to developers as they do not have to pay these fees until they have a revenue-generating location. This deferral reduces the upfront financial burden on franchisees and developers, aligning their payments with the progress of establishing their Churchs Chicken business.
This requirement provides a level of financial protection for franchisees in Maryland, ensuring that they only pay initial fees once Churchs Chicken has met its obligations to help them get started. Prospective franchisees should carefully review the franchise agreement to understand the specific pre-opening obligations that Churchs Chicken must fulfill before the initial fees become due.