What pre-opening obligations must Crave Cookies satisfy before collecting the initial franchise fee?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
- **5.
Deferral of Initial Franchise Fee.** Franchisor will not collect any initial fees until Franchisor has satisfied its pre-opening obligations to Franchisee and Franchisee has commenced doing business (Section 200.508 of the Rules).
The Illinois Attorney General's Office imposed this deferral requirement due to Franchisor's financial condition.
Source: Item 23 — RECEIPTS (FDD pages 47–194)
What This Means (2025 FDD)
According to Crave Cookies' 2025 Franchise Disclosure Document, in most states, the franchisor collects the initial franchise fee upon signing the Multi-Unit Development Agreement (MUDA). However, there is an exception for franchisees in Illinois.
Specifically, Crave Cookies will defer collecting any initial franchise fees from Illinois franchisees until Crave Cookies has fulfilled all of its pre-opening obligations to the franchisee. This deferral is further conditioned upon the franchisee commencing business operations. This requirement was imposed by the Illinois Attorney General's Office due to Crave Cookies' financial condition.
This condition provides a significant benefit to franchisees in Illinois, as it ensures that Crave Cookies fulfills its pre-opening responsibilities before receiving the franchise fee. Outside of Illinois, franchisees should be aware that the initial franchise fee is typically non-refundable and is due upon signing the MUDA.