What is the effective date of the Illinois Rider to the Development Agreement for Checkers?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
In recognition of the requirements of the Illinois Franchise Disclosure Act and the rules and regulations promulgated thereunder, the Development Agreement shall be modified by this document (the "Rider") as follows:
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- Background. Franchisor and Area Franchisee are parties to that certain Development Agreement dated , ("Agreement") that has been entered into concurrently with the entering of this Rider. This Rider is annexed to and forms part of the Agreement. This Rider is being executed because the Restaurant(s) to be developed by Area Franchisee pursuant to the Agreement will be located in the state of Illinois and/or because Area Franchisee is a resident of the state of Illinois. This Rider shall be of no force and effect unless the jurisdictional requirements of the Illinois Franchise Disclosure Act and any regulations thereunder are met independently without reference to this Rider.
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- Development Fee. Section 2.01 of the Agreement shall be amended by adding the following:
Despite the payment provisions above, Franchisor will defer collection of all initial fees owed by Area Franchisee to Franchisor under this Agreement until Franchisor has completed all of its pre-opening obligations under the first franchise agreement entered into pursuant to this Agreement and Area Franchisee has commenced doing business under the first franchise agreement. This deferral requirement has been imposed by the Illinois Attorney General's Office based on the Franchisor's financial condition.
- Arbitration; Jurisdiction and Venue. Sections 10.06 and 10.07 of the Agreement shall be amended by adding the following:
Despite the provision above, Franchisor and Area Franchisee agree that any action brought by one of them against the other must be instituted in a state or federal court located in the State of Illinois.
- Governing Law. Section 10.07 of the Agreement shall be amended further by adding the following:
Despite the provision above, Franchisor and Franchisee agree that Illinois law will govern this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the Illinois Rider to the Development Agreement does not specify a particular effective date. Instead, the agreement indicates that the rider is entered into concurrently with the Development Agreement.
The rider is designed to modify the Development Agreement in accordance with the Illinois Franchise Disclosure Act. It applies when the restaurants to be developed are located in Illinois or the franchisee is an Illinois resident. However, the rider itself states that it only becomes effective if the requirements of the Illinois Franchise Disclosure Act are met independently, without relying on the rider itself.
Prospective Checkers franchisees in Illinois should note that the rider includes provisions about deferring the collection of initial fees until Checkers has completed its pre-opening obligations and the franchisee has commenced business. This deferral is based on requirements imposed by the Illinois Attorney General's Office due to Checkers' financial condition. The rider also stipulates that any legal actions must be instituted in Illinois courts and that Illinois law will govern the agreement.
Because the effective date is tied to the date of the Development Agreement, a prospective franchisee should confirm this date with Checkers and understand all conditions that trigger the rider's effectiveness. This ensures clarity on when the specific modifications outlined in the Illinois Rider come into play.