Does the Illinois Rider to the Checkers Development Agreement affect the payment of initial fees?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, the Illinois Rider to the Development Agreement does affect the payment of initial fees. Specifically, it modifies Section 2.01 of the Development Agreement to defer the collection of initial fees.
The Illinois Rider stipulates that Checkers will postpone collecting initial fees from the Area Franchisee until Checkers has fulfilled all pre-opening obligations related to the first franchise agreement under the Development Agreement. Furthermore, the Area Franchisee must have commenced business operations under that first franchise agreement.
This deferral is a requirement imposed by the Illinois Attorney General's Office, and it is based on Checkers's financial condition. This means that a Checkers franchisee in Illinois may not have to pay the initial franchise fee upfront, which could ease the initial financial burden of starting the franchise. However, it's important to note that this deferral is contingent on Checkers completing its pre-opening obligations and the franchisee starting their business.