For Aunt Millies Bakeries franchises in Illinois, when are the initial fees payable to the Franchisor?

According to Aunt Millies Bakeries' 2025 Franchise Disclosure Document, initial fees for franchises in Illinois are deferred. Specifically, the addendum to the franchise agreement states that all initial fees are not payable to Aunt Millie's Bakeries until the franchisor has completed its initial obligations to the franchisee and the franchisee has commenced business under the Distribution Agreement. This deferral requirement was imposed by the Illinois Attorney General's Office due to Aunt Millie's Bakeries' financial condition.

This arrangement is atypical in the franchise industry, where initial franchise fees are usually due upon signing the franchise agreement. The deferral of fees until after Aunt Millie's Bakeries fulfills its obligations and the franchisee starts operating provides a significant benefit to the franchisee, reducing their upfront financial risk. It ensures that franchisees do not pay the initial fee until they are ready to start their business.

Prospective franchisees in Illinois should carefully review the Distribution Agreement to understand what constitutes the franchisor's "initial obligations" and when they are considered complete. This will help clarify the exact timing of when the initial fees become payable. It is also important to understand the financial condition of Aunt Millie's Bakeries, as this deferral was a direct result of the company's financial situation at the time the addendum was created.