Does the Illinois Rider to the Checkers Development Agreement modify the original agreement?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
ILLINOIS RIDER TO THE DEVELOPMENT AGREEMENT
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:
-
- 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.
-
- 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 indeed modify the original agreement. The document explicitly states that the Development Agreement will be modified by the Rider, acknowledging the requirements of the Illinois Franchise Disclosure Act and its associated regulations.
Several key aspects of the Development Agreement are subject to modification under the Illinois Rider. These include provisions related to arbitration, jurisdiction, venue, and governing law. For instance, the Rider stipulates that any legal action must be instituted in Illinois, and Illinois law will govern the agreement, overriding any conflicting terms in the original agreement. Additionally, the Rider addresses the collection of initial fees, deferring them until Checkers has fulfilled its pre-opening obligations and the franchisee has commenced business, a requirement imposed by the Illinois Attorney General's Office due to Checkers' financial condition.
Furthermore, the Illinois Rider includes clauses to protect the franchisee's rights under the Illinois Franchise Disclosure Act. It voids any provision that attempts to waive compliance with Illinois law and ensures that franchisees cannot waive claims of fraud in the inducement. This provision supersedes any inconsistent terms in other documents related to the franchise agreement, providing additional protection to franchisees operating in Illinois.