What is the subject of Section 6.01 of the Checkers Franchise Agreement?
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 the 2025 Checkers Franchise Disclosure Document, Section 6.01 of the Franchise Agreement is related to the initial franchise fee, but this is only applicable to franchisees in Illinois. The Illinois Rider to the Franchise Agreement modifies Section 6.01 to state 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 agreement and the franchisee has commenced business.
This deferral requirement is imposed by the Illinois Attorney General's Office based on Checkers' audited financial statements. This means that for franchisees opening a Checkers location in Illinois, they will not have to pay the initial franchise fee until after Checkers has fulfilled their pre-opening obligations and the restaurant has started operations.
This modification provides a benefit to franchisees in Illinois by delaying the initial financial burden until the business is ready to open. It also offers some assurance that Checkers will complete its pre-opening responsibilities before receiving the initial franchise fee. Prospective franchisees outside of Illinois should note that this deferral of fees does not apply to them.