What is the 'Rider' referring to in the context of the Checkers Illinois Development 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:
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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 "Rider" in the context of the Illinois Development Agreement is a document that modifies the standard Development Agreement to comply with the Illinois Franchise Disclosure Act and its associated regulations. This Rider is annexed to and forms part of the Development Agreement. It applies specifically when the restaurants to be developed under the agreement are located in Illinois or the franchisee is an Illinois resident. However, the Rider is only effective if the Illinois Franchise Disclosure Act's requirements are met independently, without relying on the Rider itself.
The Illinois Rider addresses specific aspects of the franchise relationship. It stipulates that Checkers will defer collecting initial fees from the franchisee until Checkers has fulfilled its pre-opening obligations for the first franchise agreement and the franchisee has started business operations. This deferral is mandated by the Illinois Attorney General's Office due to Checkers' financial condition. The Rider also mandates that any legal actions between Checkers and the franchisee must be initiated in an Illinois state or federal court, and Illinois law governs the agreement, overriding any conflicting provisions in the standard Development Agreement.
In summary, the Illinois Rider to the Development Agreement serves to protect franchisees in Illinois by ensuring compliance with state laws, deferring initial fee collection until certain conditions are met, and establishing Illinois as the jurisdiction and legal framework for resolving disputes. Prospective franchisees should carefully review this Rider to understand their rights and obligations under Illinois law.