What is deferred for Ledgers franchisees in Maryland until the franchisor completes its pre-opening obligations?

According to Ledgers' 2025 Franchise Disclosure Document, all initial fees and payments owed by franchisees in Maryland are deferred until Ledgers completes its pre-opening obligations under the franchise agreement. This modification to Item 5 of the FDD and Section 2.1 of the Franchise Agreement is due to the Maryland Securities Commissioner requiring a financial assurance based on Ledgers' financial condition.

This deferral of initial fees and payments provides a significant benefit to prospective Ledgers franchisees in Maryland. It reduces the upfront financial burden and risk, as franchisees do not have to pay these fees until Ledgers has fulfilled its obligations to help them get started. This can be particularly helpful for franchisees who may have limited capital or who are concerned about the franchisor's ability to provide the necessary support.

It is important for prospective franchisees to understand exactly what Ledgers' pre-opening obligations are, as this will determine when the initial fees and payments become due. These obligations are detailed in the franchise agreement and may include things like site selection assistance, training, and providing marketing materials. Franchisees should also carefully review Ledgers' financial condition to assess the potential risk of the franchisor not being able to fulfill its obligations.

While the FDD mentions the deferral of initial fees, it does not specify the exact types or amounts of 'payments' that are also deferred. A prospective franchisee should seek clarification from Ledgers regarding which specific payments beyond the initial franchise fee are subject to this deferral in Maryland. Understanding the full scope of deferred payments is crucial for accurate financial planning.