factual

When is payment of the Development Fee deferred for an All States M.E.D. franchise?

All_States_M_E_D Franchise · 2024 FDD

Answer from 2024 FDD Document

ILLINOIS ADDENDUM TO THE AREA DEVELOPMENT AGREEMENT

If any of the terms of the Area Development Agreement are inconsistent with the terms below, the terms below control.

    1. Initial Fee Deferral. The Area Development Agreement 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, the payment of the Development Fee is deferred under specific conditions for franchisees in Illinois. The Illinois Addendum to the Area Development Agreement states that the collection of all initial fees is deferred until All States M.E.D. has fulfilled its pre-opening obligations to the franchisee, and the franchisee has started conducting business under the Franchise Agreement.

Specifically, the payment of the Development Fee is deferred until the first franchise business opens. This deferral requirement was imposed by the Illinois Attorney General's Office due to All States M.E.D.'s financial condition. This modification ensures that franchisees in Illinois do not have to pay the initial fees until All States M.E.D. has met its obligations and the franchisee is ready to commence operations.

This deferral provides a significant benefit to franchisees in Illinois, as it reduces their upfront financial burden and aligns the payment of fees with the commencement of business operations. However, it's important to note that this deferral is specific to Illinois and is a result of the franchisor's financial condition, as determined by the Illinois Attorney General's Office. Prospective franchisees outside of Illinois should confirm the payment terms applicable to their specific location.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.