Under what condition is the payment of the initial franchise fee deferred for a Floyds 99 franchise?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
re Act or any other law of Illinois is void. | stipulation or provision purporting to bind any person acquiring any franchise to waive compliance with | | 6. franchise. | No statement, questionnaire, or acknowledgement signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the | | concurrently with the execution of the Development Agreement on the day and year first above written. | IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Illinois Rider | | FLOYD'S 99 FRANCHISING, LLC | DEVELOPER (Print Name) | | By: | By: | | Title: | Title: |
RIDER TO THE FLOYD'S 99 FRANCHISING, LLC FRANCHISE AGREEMENT FOR THE STATE OF ILLINOIS
| This Rider to the Franchise Agreement by and between Floyd's 99 Franchising, LLC and Franchisee is dated, 20 |
|---|
| 1. |
| Section 24.4 is deleted in its entirety and the following is substituted in its place: |
| 24.4 |
| Governing Law/Consent to Venue and Jurisdiction. |
| Except to the extent |
| governed by the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. Sections 1051 et |
| seq.), or other federal law, Illinois law governs this Agreement. |
| 2. |
| Payment of the initial franchise fee is deferred until such time as the franchisor completes |
| its initial obligations and franchisee is open for business. The deferral of the initial franchise fee is required |
| by the Illinois Attorney General's Office based on our financial statements. |
| 3. |
| The Franchisor reserves the right to require the Franchisee to pay up to $25,000 for an |
| opening advertising and marketing campaign for the Shop that the Franchisee establishes under this |
| Franchise Agreement. |
| 4. |
| The Franchisee's rights upon termination and non-renewal of this Agreement are set forth |
| in Sections 19 and 20 of the Illinois Franchise Disclosure Act. |
| 5. |
| In conformance with Section 41 of the |
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, in the state of Illinois, payment of the initial franchise fee is deferred under specific conditions. The initial franchise fee payment is not due until Floyds 99 completes its initial obligations and the franchisee is open for business. This deferral is mandated by the Illinois Attorney General's Office and is based on Floyds 99's financial statements.
This deferral of the initial franchise fee provides a significant benefit to franchisees in Illinois, as it reduces the upfront financial burden. Instead of paying the fee before the business is operational, franchisees can use those funds for initial setup costs, marketing, or working capital. This arrangement also aligns the franchisor's interests with the franchisee's success, as Floyds 99 only receives the fee once the franchisee is ready to start generating revenue.
It is important to note that this deferral is specific to Illinois and is a result of the Illinois Attorney General's Office's requirements. Franchisees in other states may not have the same benefit. Additionally, the FDD indicates that Floyds 99 reserves the right to require franchisees to pay up to $25,000 for an opening advertising and marketing campaign, which could offset some of the financial relief provided by the fee deferral. Prospective franchisees should carefully review the terms of the franchise agreement and any state-specific addenda to fully understand their financial obligations.