When is the initial Franchise Fee due to City Publications?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
SECTION 4. FEES
Franchisee agrees to pay Franchisor the following fees and amounts at the times specified herein:
A. Franchise Fee
Franchisee shall pay a Franchise Fee to Franchisor of ___________________________________ Dollars ($_________). The fee is fully due and payable when you sign this Franchise Agreement. See Exhibit C for any applicable state law affecting the due date of the Franchise Fee. The Franchise Fee shall be deemed fully earned upon payment and is nonrefundable. Said Franchise Fee includes payment for:
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- Access to Franchisor's proprietary materials and process including, but not limited to, an initial supply of sales material;
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- Use of a unique domain for design and creation of a designated website for the Franchised Business, and a link between such website and the CITY PUBLICATIONS website. This domain is also for all email communication related to the franchise;
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- Exclusive rights to distribute Card Packs and other approved products within the Exclusive Territory as described in Section 3.B;
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- The CITY PUBLICATIONS "Quick Start Program," which program consists of information, activities and materials designed to assist Franchisee in commencing operation of the Franchised Business. The Quick Start Program is provided to Franchisee upon execution of this Agreement and Franchisee's payment of the Franchise Fee;
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- An initial training program and training materials to be provided to Franchisee pursuant to Section 10.A;
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- On-site sales training and assistance as further described in Section 10.D;
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Source: Item 5 — INITIAL FEES (FDD page 10)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, the franchise fee is due in full when the Franchise Agreement is signed. The FDD specifies that the franchise fee is considered fully earned upon payment and is nonrefundable. This fee grants the franchisee access to City Publications' proprietary materials, a website for their franchised business, exclusive territory rights for distributing card packs and other approved products, participation in the Quick Start Program, initial training, and ongoing sales assistance.
Prospective franchisees should be aware that the franchise fee is nonrefundable, so it's crucial to carefully evaluate the opportunity before signing the agreement. This is a fairly standard practice in the franchise industry, as the initial fee covers the franchisor's costs of setting up the franchisee and providing initial training and support.
However, there is an exception for franchisees in Maryland. Based on City Publications' financial condition, the Maryland Securities Commissioner requires a financial assurance. Therefore, all initial fees and payments owed by franchisees in Maryland are deferred until City Publications completes its pre-opening obligations under the franchise agreement. This provides an added layer of protection for franchisees in Maryland, ensuring that they only pay the franchise fee after City Publications has fulfilled its initial obligations.