For Zoomin Groomin franchisees, what triggers the end of the initial fee deferral?
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."
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.
"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."
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."
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.
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 FDD, the trigger for the end of the initial fee deferral depends on the state where the franchise is located. In general, the initial fee is deferred until certain pre-opening obligations are met and/or the franchise location opens for business.
For example, in Minnesota, the initial fee is deferred until the franchisee has opened the franchised business. Similarly, in Illinois, payment of the initial franchise fee is deferred until Zoomin Groomin has satisfied its preopening obligations to the franchisee and the franchisee has commenced doing business. The Illinois Attorney General's Office imposed this deferral requirement due to Zoomin Groomin's financial condition. In California, the initial fee deferral ends when Zoomin Groomin has completed all its pre-opening obligations and the franchisee is open for business. In Virginia, the initial fee is deferred until Zoomin Groomin has completed its pre-opening obligations under the franchise agreement.
In North Dakota, Zoomin Groomin defers collection of the Initial Fee until they have 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 Maryland, all initial fees and payments owed by franchisees are deferred until Zoomin Groomin completes its pre-opening obligations under the Franchise Agreement.
Prospective franchisees should carefully review the addendum specific to their state to understand the exact conditions that trigger the end of the initial fee deferral. This ensures they are aware of when they will be required to pay the initial franchise fee and can plan their finances accordingly.