Why are the initial fees and payments deferred for Cool Binz franchisees in Maryland?

According to Cool Binz's 2025 Franchise Disclosure Document, the Maryland Securities Commissioner requires a financial assurance due to the franchisor's financial condition. As a result, Cool Binz defers all initial fees and payments owed by franchisees in Maryland. This deferral lasts until Cool Binz completes its pre-opening obligations as outlined in the franchise agreement.

For a prospective Cool Binz franchisee in Maryland, this deferral offers a significant benefit. It reduces the upfront financial burden and risk, as the franchisee does not have to pay the initial fees until Cool Binz has fulfilled its obligations to help them get started. This arrangement provides some assurance that Cool Binz is committed to supporting the franchisee before receiving payment.

This type of arrangement is not typical in franchising. Usually, initial franchise fees are paid upfront and are non-refundable. The Maryland requirement provides additional protection for franchisees in that state, ensuring that Cool Binz is financially stable and fulfills its initial obligations before collecting fees.