Are additional amounts payable from All County to the franchisee if the franchisee voluntarily terminates within 365 days?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
- 22.1.1. Voluntary Termination Within 365 Days. Within three hundred sixty five (365) days of the Effective Date of the Agreement, you may elect to notify us in writing of your voluntarily election to terminate the Franchise Agreement. You acknowledge and agree that if you elect to voluntarily terminate the Agreement under this Section, then in reasonable and sufficient consideration of our costs and expenses incurred with you prior to you electing to terminate the Agreement and in allowing your voluntary termination of the Agreement, you must assign back to us in writing all franchise and other rights that you were granted under the Agreement with no other additional amounts payable from us to you. Additionally, you and your owners agree to comply in all respects with all the posttermination provisions of the Agreement, including, without limitation, the requirement that the you and your owners agree to execute general releases, in form satisfactory to us, of any and all claims against us and our shareholders, officers, directors, employees, agents, successors and assigns. Any general release required in the Franchise Agreement as a condition of renewal, sale, and/or assignment or transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
Source: Item 23 — Receipts (FDD pages 43–157)
What This Means (2025 FDD)
According to All County's 2025 Franchise Disclosure Document, if a franchisee chooses to voluntarily terminate the Franchise Agreement within the first 365 days, All County will not pay any additional amounts to the franchisee. Instead, the franchisee must assign back all franchise rights to All County. This assignment serves as consideration for All County's costs incurred prior to the termination and for allowing the voluntary termination.
This policy means that a franchisee who terminates early essentially forfeits their franchise rights without receiving any compensation from All County. This is a significant consideration for potential franchisees, as it highlights the risk of early termination. Franchisees should carefully evaluate their business plan and financial situation before committing to the franchise to minimize the likelihood of needing to terminate early.
Furthermore, the franchisee and their owners must comply with all post-termination provisions outlined in the agreement, including executing general releases of claims against All County. These releases must be in a form satisfactory to All County, protecting the franchisor from potential legal action. However, any general release required in the Franchise Agreement as a condition of renewal, sale, and/or assignment or transfer shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.