Does the Illinois Rider to the Checkers Franchise Agreement affect pre-opening obligations?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- Initial Franchise Fee. Section 6.01 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 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 Illinois Rider to the Franchise Agreement does affect pre-opening obligations. Specifically, it addresses the initial franchise fee and when it is collected.
The Illinois Rider states that Checkers will defer collection of all initial fees owed by the franchisee until Checkers has completed all of its pre-opening obligations under the Franchise Agreement and the franchisee has commenced business. This deferral requirement was imposed by the Illinois Attorney General's Office based on Checkers' audited financial statements.
This means that a prospective Checkers franchisee in Illinois will not have to pay the initial franchise fee until Checkers has fulfilled its pre-opening responsibilities, such as site selection assistance, providing training, and supplying operations manuals. This could ease the financial burden on new franchisees during the initial stages of setting up their restaurant. It is important to note that this deferral is specific to Illinois and is a result of the Illinois Attorney General's Office's requirements based on Checkers' financial condition.