When does the franchisee have to commence doing business under the Franchise Agreement for All States M.E.D. before initial fees are collected?

According to All States M.E.D.'s 2024 Franchise Disclosure Document, an addendum to the franchise agreement modifies the standard payment terms for franchisees in Illinois. Specifically, All States M.E.D. defers the collection of all initial fees until two conditions are met. First, All States M.E.D. must have fulfilled its pre-opening obligations to the franchisee. Second, the franchisee must have commenced doing business under the Franchise Agreement.

This deferral also applies to the payment of the Development Fee, which is postponed until the first franchise business opens. This modification is a result of a requirement imposed by the Illinois Attorney General's Office due to All States M.E.D.'s financial condition.

For a prospective All States M.E.D. franchisee in Illinois, this deferral of initial fees represents a significant benefit. It reduces the upfront financial burden and aligns the payment of fees with the actual commencement of business operations. This arrangement provides some financial security, ensuring that franchisees are not paying fees until All States M.E.D. has met its obligations and the business is ready to open. However, this deferral is specific to Illinois and is due to the franchisor's financial condition, which may be a point of concern for potential franchisees in any location.