Under Illinois law, when is a Dryject franchisee required to pay the initial franchise fee?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
Based on Section 15 of the Illinois Franchise Disclosure Act of 1987 and Section 200.508 of the Administrative Rules and Regulations, the Illinois Attorney General's office imposed this deferral requirement due to Franchisor's financial condition requiring that until such time as there is a change in Franchisor's financial condition, Item 5 is amended as follows: The initial franchise fee paid shall be deferred until all initial pre-obligations owed to you by us have been completed and you have commenced doing business.
Item 7 is amended as follows: The initial franchise fee shall be deferred until all initial pre-opening obligations owed to you by us have been completed and you have commenced doing business.
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, Illinois law stipulates that the initial franchise fee is deferred for franchisees in Illinois. Specifically, the payment is not due until Dryject has fulfilled all its pre-opening obligations to the franchisee, and the franchisee has commenced business operations. This deferral is a requirement imposed by the Illinois Attorney General's office due to Dryject's financial condition.
This deferral of the initial franchise fee provides a significant benefit to prospective Dryject franchisees in Illinois. It reduces the upfront financial burden and risk, as the franchisee does not have to pay the fee until Dryject has delivered on its initial promises and the business is up and running. This arrangement aligns the interests of both parties, as Dryject is incentivized to provide the necessary support and fulfill its obligations promptly to trigger the fee payment.
Furthermore, the Illinois addendum to the franchise agreement reinforces this deferral, stating that Dryject must defer payment of the initial franchise fee until it has completed its pre-opening obligations and the franchisee has commenced doing business. This provision is included in the franchise agreement to ensure compliance with Illinois law and to protect the franchisee's interests. This protection extends to preventing franchisees from waiving compliance with the Illinois Franchise Disclosure Act or any other Illinois law.
It is important for prospective Dryject franchisees in Illinois to carefully review the Illinois addendum to the Franchise Disclosure Document and the franchise agreement to fully understand the terms and conditions of the fee deferral. They should also consult with an attorney to ensure that their rights are protected and that they are fully aware of their obligations under the franchise agreement and Illinois law.