What must an All States M.E.D. franchisee do to trigger the payment of the deferred Development Fee?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
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- Initial Fee Deferral. Item 5 of the Disclosure Document is modified to also provide that we defer collection of all initial fees until we have satisfied our pre-opening obligations to you and you have commenced doing business under the Franchise Agreement. Payment of the Development Fee is deferred until the first franchise business opens. The Illinois Attorney General's Office imposed this deferral requirement due to our financial condition.
Source: Item 23 — RECEIPTS (FDD pages 44–174)
What This Means (2024 FDD)
According to the 2024 All States M.E.D. Franchise Disclosure Document, in Illinois, the payment of the Development Fee is deferred until the first franchise business opens. This deferral is a requirement imposed by the Illinois Attorney General's Office due to All States M.E.D.'s financial condition. This means that an All States M.E.D. franchisee in Illinois will not be required to pay the Development Fee until they have commenced business operations.
This deferral of the Development Fee provides a significant benefit to franchisees in Illinois, as it reduces the initial financial burden of starting the franchise. Instead of paying the fee upfront, franchisees can use those funds to cover other startup costs, such as securing a location, purchasing equipment, and hiring staff. This can make it easier for franchisees to get their business off the ground and increase their chances of success.
It is important to note that this deferral only applies to franchisees in Illinois and is a result of the franchisor's financial condition. Franchisees in other states may be required to pay the Development Fee upfront, as outlined in the standard Area Development Agreement. Prospective franchisees should carefully review the FDD and any state-specific addenda to understand the payment terms and conditions that apply to their specific situation. They should also inquire with All States M.E.D. about their current financial condition and whether any similar deferral arrangements are in place in other states.