Why does Checkers defer the collection of initial fees in Illinois?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
Despite the payment provisions above, Franchisor will defer collection of all initial fees owed by Franchisee to Franchisor under this Agreement until Franchisor has completed all of its pre-opening obligations under this Agreement and the Franchisee has commenced doing business. This deferral requirement has been imposed by the Illinois Attorney General's Office based on the Franchisor's audited financial statements.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the collection of initial franchise fees is deferred in Illinois due to requirements imposed by the Illinois Attorney General's Office. This deferral applies to both the standard Franchise Agreement and the Development Agreement.
Specifically, Checkers will not collect initial fees from franchisees or area franchisees in Illinois until Checkers has fulfilled all pre-opening obligations outlined in the respective agreements. Furthermore, the franchisee or area franchisee must have commenced business operations before these fees are collected.
This requirement is based on Checkers' audited financial statements or financial condition, as determined by the Illinois Attorney General's Office. This measure ensures that franchisees are not required to pay initial fees until Checkers has met its obligations and the franchisee is ready to begin operations, providing a level of financial protection for franchisees in Illinois.