For a Crab N Spice franchise in California, what must happen before any fees are collected from the franchisee?

According to Crab N Spice's 2024 Franchise Disclosure Document, if you are opening a franchise in California, all fees are deferred until Crab N Spice has delivered all pre-opening obligations and the franchisee is open for business. This amendment to Item 5 of the Disclosure Document is specific to California.

This means that a prospective Crab N Spice franchisee in California will not be required to pay any fees, such as the initial franchise fee, until Crab N Spice has fulfilled all of its responsibilities related to the opening of the franchise. This includes providing training, site selection assistance, and other support services outlined in the franchise agreement.

This arrangement is beneficial for the franchisee as it reduces the financial burden during the initial stages of setting up the business. It also ensures that the franchisee only pays fees once they are ready to commence operations, providing a level of security and assurance that Crab N Spice is committed to supporting the franchisee's success. This is not necessarily standard practice in the franchise industry, as many franchisors require upfront payments of fees regardless of how close the franchisee is to opening.