What is the reason for deferring the initial franchise fee for Aw franchises in Illinois?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
Payment of the Initial Franchise Fee will be deferred until Franchisor has met its initial obligations to franchisee, and franchisee has commenced doing business. This financial assurance requirement was imposed by the Office of the Illinois Attorney General due to Franchisor's financial condition.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, the initial franchise fee is deferred in Illinois due to Aw's financial condition. The Illinois Attorney General's Office mandates that Aw defer the fee until Aw has fulfilled all initial obligations to the franchisee, and the franchisee has started business operations. This requirement is specifically imposed because of Aw's financial status.
This deferral provides a significant benefit to franchisees in Illinois, as they are not required to pay the initial franchise fee upfront. Instead, they can delay payment until Aw has met its obligations and the franchisee has commenced operations. This arrangement reduces the initial financial burden on the franchisee and provides some assurance that Aw is committed to supporting the franchisee's launch.
It is important for prospective Aw franchisees in Illinois to understand the specific obligations that Aw must fulfill before the initial franchise fee becomes due. Franchisees should also monitor Aw's financial condition and ensure that Aw is meeting its commitments under the franchise agreement. This deferral is outlined in the addendum to the franchise disclosure document for the state of Illinois.