Until when does Checkers defer collection of initial fees in Illinois?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
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, for franchisees in Illinois, Checkers defers the collection of initial fees until certain conditions are met. Specifically, Checkers will defer collecting initial fees until it has completed all of its pre-opening obligations under the Franchise Agreement. Additionally, the franchisee must have commenced doing business.
This deferral is a requirement imposed by the Illinois Attorney General's Office, based on Checkers' audited financial statements. This suggests that the deferral is tied to ensuring that Checkers fulfills its obligations to the franchisee before requiring payment of the initial fees.
For prospective Checkers franchisees in Illinois, this deferral could be beneficial, as it reduces the upfront financial burden and aligns the payment of fees with the commencement of business operations. However, it is important to understand exactly what constitutes Checkers' pre-opening obligations and to ensure that these obligations are clearly defined in the Franchise Agreement to avoid any potential disputes.