Is the collection of the Zoomin Groomin Initial Fee deferred?
Zoomin_Groomin Franchise · 2025 FDDAnswer from 2025 FDD Document
Initial Fee Deferral: Franchisor defers the collection of the Initial Fee until the opening of the franchised business.
Items 5 and Item 7 are amended to also provide: "The Minnesota Department of Commerce requires us to defer payment of the initial franchise fee owed by franchisees to the franchisor until the franchisee has opened the franchised business."
North Dakota requires the Franchisor to defer collection of the Initial Fee until the Franchisor has completed all of their initial obligations owed to North Dakota Franchisees under the Franchise Agreement or other documents and the Franchisee has commenced doing business pursuant to the Franchise Agreement.
Item 5 of the Disclosure Document is modified to also provide: "The Virginia State Corporation Commission's Division of Securities and Retail Franchising requires us to defer payment of the initial franchise fee and other initial payments owed by franchisees to the franchisor until the franchisor has completed its pre-opening obligations under the franchise agreement."
Item 5 of the FDD 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."
Payment of the initial franchise fee shall be deferred until Franchisor has satisfied its preopening obligations to Franchisee and Franchisee has commenced doing business. The Illinois Attorney General's Office imposed this deferral requirement due to Franchisor's financial condition.
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 17 — g. of the Disclosure Document is modified to state that, in addition to the grounds for immediate termination specified in Item 17.h., the franchisor can terminate upon written notice and a 60 day opportunity to cure for a breach of the Franchise Agreement. (FDD pages 51–65)
What This Means (2025 FDD)
According to the 2025 Zoomin Groomin Franchise Disclosure Document, the collection of the initial franchise fee is deferred in certain states. For instance, in Minnesota, the franchisor defers the collection of the Initial Fee until the opening of the franchised business. The FDD also states, "The Minnesota Department of Commerce requires us to defer payment of the initial franchise fee owed by franchisees to the franchisor until the franchisee has opened the franchised business."
Similarly, in North Dakota, Zoomin Groomin is required to defer collection of the Initial Fee until the Franchisor has completed all of their initial obligations owed to North Dakota Franchisees under the Franchise Agreement or other documents and the Franchisee has commenced doing business pursuant to the Franchise Agreement. In Virginia, the Virginia State Corporation Commission's Division of Securities and Retail Franchising requires Zoomin Groomin to defer payment of the initial franchise fee and other initial payments owed by franchisees to the franchisor until the franchisor has completed its pre-opening obligations under the franchise agreement.
In California, the Department of Financial Protection and Innovation requires that Zoomin Groomin 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. In Illinois, payment of the initial franchise fee is deferred until Zoomin Groomin has satisfied its preopening obligations to Franchisee and Franchisee has commenced doing business. The Illinois Attorney General's Office imposed this deferral requirement due to Franchisor's financial condition. In Maryland, based upon Zoomin Groomin'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.
This deferral of the initial fee has significant implications for prospective Zoomin Groomin franchisees. It reduces the upfront financial burden, allowing franchisees to allocate capital to other essential startup costs. However, the deferral is often contingent upon the franchisor's financial condition or regulatory requirements, which could indicate underlying financial risks associated with the franchise. Prospective franchisees should carefully review the specific conditions and requirements for initial fee deferral in their state and understand the franchisor's financial health.