Under what condition are the initial fees and payments deferred for a Focalpoint Coaching franchise in Maryland?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Background. We and you are parties to that certain Franchise Agreement that has been signed at the same time as the signing of this Rider (the "Franchise Agreement") that has been signed concurrently with the signing of this Rider. This Rider is annexed to and forms part of the Franchise Agreement. This Rider is being signed because (a) you are a resident of the State of Maryland, and/or (b) the Franchised Business that you will operate under the Franchise Agreement will be located in Maryland.
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- Acknowledgements. Sections 1.B(1), (2), (3), (4), (6), (9), (11) and (13) are deleted from the Franchise Agreement.
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- Initial Fees. The following language is added to the end of Sections 3.A and 4.A of the Franchise Agreement:
- "Based upon our financial condition, the Maryland Securities Commissioner has requested a financial assurance. Therefore, all initial fees and payments owed by you shall be deferred until we complete our pre-opening obligations under the Franchise Agreement."
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- Releases. The following language is added to the end of the third paragraph in Section 4.A. (entitled "Initial Training") and to the end of Sections 12.C.(8) (entitled "Conditions for Approval of Transfer") and 13.C. (entitled "Agreements/Releases") of the Franchise Agreement:
However, such general release will not apply to claims arising under the Maryland Franchise Registration and Disclosure Law.
- Insolvency. The following language is added to the end of Section 14.B.(18) of the Franchise Agreement:
; termination upon insolvency might not be enforceable under federal insolvency law (11 U.S.C. Sections 101 et seq.), but we and you agree to enforce this provision to the maximum extent the law allows.
- Consent to Jurisdiction. The following language is added to the end of Section 17.G of the Franchise Agreement:
However, subject to the parties' arbitration obligations, you may bring an action in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law.
Source: Item 22 — Contracts (FDD pages 56–57)
What This Means (2025 FDD)
According to Focalpoint Coaching's 2025 Franchise Disclosure Document, for franchisees in Maryland, the initial franchise fees and payments are deferred until Focalpoint Coaching completes its pre-opening obligations under the Franchise Agreement. This deferral is specifically requested by the Maryland Securities Commissioner due to Focalpoint Coaching's financial condition.
This condition means that a new Focalpoint Coaching franchisee in Maryland will not have to pay the initial franchise fee upfront. Instead, the payment is delayed until Focalpoint Coaching has fulfilled all of its responsibilities related to getting the franchise ready to open. This could include site selection assistance, training, and providing necessary materials.
This arrangement provides a level of financial protection for the franchisee. By deferring the initial fees, the franchisee is not investing a significant sum of money until Focalpoint Coaching has demonstrated its commitment to supporting the launch of the franchise. This can reduce the financial risk for the franchisee, especially considering the Maryland Securities Commissioner's concern about Focalpoint Coaching's financial condition.
Prospective franchisees in Maryland should carefully review the Franchise Agreement and any related addenda to fully understand the pre-opening obligations of Focalpoint Coaching and the specific conditions under which the initial fees will become due. They should also seek legal and financial advice to assess the implications of this deferral and Focalpoint Coaching's overall financial stability.