What section of the Ledgers Franchise Agreement is modified regarding the deferral of initial fees and payments?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
S WEBSITE MAY BE DIRECTED TO THE CALIFORNIA DEPARTMENT OF FINANCIAL PROTECTION AND INNOVATION at www.dfpi.ca.gov.
The highest interest rate allowed by law in California is ten percent (10%) annually.
Initial Fee Deferral:
Item 5 of the FDD and Section 2.1 of the Franchise Agreement is modified with the addition of the following language:
"The Department of Financial Protection and Innovation requires that the franchisor defer the collection of all initial fees from California franchisees until the franchisor has completed all its pre-opening obligations and franchisee is open for business."
Franchisees must sign a personal guaranty, making you and your spouse individually liable for your financial obligations under the agreement if you are married. The guaranty will place your and your spouse's marital and personal assets at risk, perhaps including your house, if your franchise fails.
Franchise Investment Law (Corporations Code sections 31512 and 31512.1) states that any provision of a franchise agreement or related document requiring the franchisee to waive specific provisions of the law is contrary to public policy and is void and unenforceable.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, the deferral of initial fees and payments is addressed with modifications to specific sections of the Franchise Agreement, depending on the state. For California, Item 5 of the FDD and Section 2.1 of the Franchise Agreement are modified to state that the Department of Financial Protection and Innovation requires Ledgers to defer the collection of all initial fees from California franchisees until Ledgers has completed all its pre-opening obligations and the franchisee is open for business.
For Minnesota, Section 2.1 of the Franchise Agreement is modified to state that payment of the Initial Fee is deferred until the franchisee has opened the franchised business. Item 5 and Item 7 of the FDD are also modified to reflect that the Minnesota Department of Commerce requires Ledgers to defer payment of the initial franchise fee until the franchisee has opened.
For North Dakota and South Dakota, Item 5 of the FDD is modified to include language that Ledgers defers the collection of all initial fees from franchisees in those states until the franchisee is open for business. This means that franchisees in these states will not be required to pay the initial franchise fee until they have completed the necessary steps to open their Ledgers franchise.