In Virginia, when does Cr3 American Exteriors defer the collection of initial fees from franchisees?
Cr3_American_Exteriors Franchise · 2025 FDDAnswer from 2025 FDD Document
VIRGINIA
As to franchises governed by the Virginia Retail Franchising Act, if any of the terms of the Disclosure Document are inconsistent with the terms below, the terms below control.
In recognition of the restrictions contained in Section 13.1-564 of the Virginia Retail Franchising Act, the Franchise Disclosure Document is amended as follows:
Additional Disclosure: The following statements are added to Item 17.h.
Pursuant to Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to cancel a franchise without reasonable cause. If any ground for default or termination stated in the franchise agreement does not constitute "reasonable cause," as that term may be defined in the Virginia Retail Franchising Act or the laws of Virginia, that provision may not be enforceable.
Item 5 of the Disclosure Document and Item 4 of the Franchise Agreement is modified to also provide: "The franchisor defers the collection of all initial fees from Virginia franchisees until the franchisor has completed all its pre-opening obligations."
Source: Item 23 — RECEIPTS (FDD pages 53–150)
What This Means (2025 FDD)
According to Cr3 American Exteriors's 2025 Franchise Disclosure Document, for franchises governed by the Virginia Retail Franchising Act, the franchisor defers the collection of all initial fees from Virginia franchisees until Cr3 American Exteriors has completed all its pre-opening obligations. This modification is specifically noted in Item 5 of the Disclosure Document and Item 4 of the Franchise Agreement.
This deferral means that a new Cr3 American Exteriors franchisee in Virginia will not be required to pay the initial franchise fee until the franchisor has fulfilled all of its responsibilities related to getting the franchise location ready to open. This could include site selection assistance, training, providing operations manuals, and other support services outlined in the franchise agreement.
This arrangement benefits the franchisee by reducing their upfront financial burden and aligning the payment of the initial fee with the franchisor's performance in setting up the franchise. It also provides some assurance that Cr3 American Exteriors is committed to supporting the franchisee through the initial stages of launching the business. This type of deferral is not universally offered by franchisors, so it represents a potentially favorable term for franchisees in Virginia.