What pre-opening obligations must Ledgers complete before initial fees are due from Maryland franchisees?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
- D. Item 5 of the FDD and Section 2.1 of the FA are modified with the addition of the following language:
- "Based upon the franchisor's financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until the franchisor completes its pre-opening obligations under the franchise agreement. "
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, the Maryland Securities Commissioner requires a financial assurance based on Ledgers' financial condition. As a result, all initial fees and payments owed by Maryland franchisees are deferred.
This deferral remains in effect until Ledgers completes all of its pre-opening obligations as outlined in the franchise agreement. This means that a new Ledgers franchisee in Maryland will not have to pay any initial fees until Ledgers has fulfilled its responsibilities to help them get started.
This modification to the standard franchise agreement is specific to Maryland and aims to protect franchisees, given Ledgers' financial condition. It ensures that franchisees do not pay fees upfront before Ledgers has provided the necessary support and resources to launch the business. Prospective franchisees in Maryland should carefully review the franchise agreement to understand the full scope of Ledgers' pre-opening obligations.