Who imposed the deferral requirement for initial fees for All States M.E.D.?
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 All States M.E.D.'s 2024 Franchise Disclosure Document, the Illinois Attorney General's Office imposed the deferral requirement for initial fees. This requirement is specific to franchises governed by the Illinois Franchise Disclosure Act.
This deferral means that All States M.E.D. will not collect initial fees from franchisees in Illinois until All States M.E.D. has fulfilled its pre-opening obligations to the franchisee and the franchisee has started operating under the Franchise Agreement. Additionally, the payment of the Development Fee is deferred until the first franchise business opens.
This condition was put in place due to All States M.E.D.'s financial condition, offering some protection to franchisees in Illinois. Prospective franchisees should carefully review All States M.E.D.'s financial statements and understand the implications of this deferral, as it indicates potential financial instability within the company.