When can City Publications collect initial fees from California franchisees?

According to City Publications' 2025 Franchise Disclosure Document, the Department of Financial Protection and Innovation mandates that City Publications must defer collecting any initial fees from franchisees in California until two conditions are met. First, City Publications must have fulfilled all of its pre-opening obligations to the franchisee. Second, the franchisee must be open and operating their City Publications franchise business. This requirement is specific to California franchisees due to state regulations.

This deferral of initial fees provides a significant benefit to prospective City Publications franchisees in California. It ensures that franchisees are not required to pay the initial franchise fee until City Publications has provided the necessary support and the franchisee is actually up and running. This reduces the financial risk for new franchisees, as they are not investing a substantial sum before the business is operational.

This practice is not universally followed by all franchisors, as initial fees are often collected upon signing the franchise agreement. The California-specific rule reflects the state's interest in protecting franchisees and ensuring that franchisors fulfill their pre-opening obligations. Prospective franchisees should be aware of this protection and confirm with City Publications that they understand and will comply with this requirement.