What condition must the franchisee meet before Zoomin Groomin can collect the initial franchise fee in Illinois?
Zoomin_Groomin Franchise · 2025 FDDAnswer from 2025 FDD Document
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- The Franchise Agreement is modified to also provide that we defer collection of all initial fees until we have satisfied our pre-opening obligations to you and you have commenced doing business under the Franchise Agreement. The Illinois Attorney General's Office imposed this deferral requirement due to our financial condition.
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- Payment of the initial franchise fee shall be deferred until Franchisor has satisfied its preopening obligations to Franchisee and Franchisee has commenced doing business. The Illinois Attorney General's Office imposed this deferral requirement due to Franchisor's financial condition.
Source: Item 9 — 01. Financial Statements and Exhibits. (FDD pages 68–156)
What This Means (2025 FDD)
According to the 2025 Zoomin Groomin Franchise Disclosure Document, franchisees in Illinois do not pay the initial franchise fee until certain conditions are met. Specifically, Zoomin Groomin must first fulfill all of its pre-opening obligations to the franchisee. After Zoomin Groomin has met these obligations, the franchisee must have commenced business operations under the Franchise Agreement. Only after both of these conditions are satisfied can Zoomin Groomin collect the initial franchise fee from franchisees in Illinois. This deferral requirement was imposed by the Illinois Attorney General's Office due to Zoomin Groomin's financial condition.
This arrangement provides a significant benefit to prospective Zoomin Groomin franchisees in Illinois. By deferring the initial franchise fee, franchisees are not required to pay this substantial sum until Zoomin Groomin has demonstrated its commitment to supporting the franchisee's launch. This reduces the financial risk for the franchisee, as they are not investing heavily upfront before seeing tangible support from the franchisor. It also ensures that Zoomin Groomin is incentivized to provide the necessary pre-opening assistance to get the franchisee's business up and running.
It's important for prospective franchisees to understand exactly what constitutes Zoomin Groomin's "pre-opening obligations." This should be clearly defined in the Franchise Agreement and discussed during the due diligence process. Franchisees should also confirm that they have indeed "commenced doing business" before paying the initial franchise fee, ensuring they are fully operational and generating revenue. This deferral is specific to Illinois and is a result of the franchisor's financial situation, so franchisees in other states may not have the same protection.