What is the dependency between meeting minimum gross revenue requirements and maintaining exclusive territory rights for an All County franchise?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
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4. PERFORMANCE REQUIREMENTS.
- 4.1. Performance Standards. You agree that you will at all times faithfully, honestly and diligently perform your obligations hereunder, continuously exert your best efforts to promote and enhance the Business and not engage in any other business or activity that conflicts with your obligations to operate the Business in compliance with this Agreement.
- 4.2. Days of Operation. You acknowledge and agree that, as required by our Methods of Operation, the Business must operate the entire calendar year, unless otherwise approved in writing by us, and must be managed at all times by your Managing Owner or an owner or employee approved in writing by us.
- 4.3. Minimum Gross Revenue Requirements. You must attain or exceed each minimum requirement (the "Requirement") for Gross Revenue identified below for each respective specified period. Upon your first (1st) failure to attain the required Requirement, you may cure the failure by paying the Royalty Fee and Advertising Fund contribution and by making the local advertising expenditure required under this Agreement, all calculated with reference to the difference between the actual Gross Revenue of the Business for the specified period and the amount of the Requirement for that period. Upon your second (2nd) failure to attain the specified Requirement, then you shall be deemed to be in default under this Agreement and we may, in our sole business judgment, terminate this Agreement and all rights granted in this Agreement, with such termination effective immediately upon notice to you but without prior opportunity to cure the default. Otherwise we may elect to render all or any portion of the Territory as non-exclusive.
- 4.3.1. Minimum Gross Revenue Requirements. You acknowledge and agree that you must attain or exceed the following minimum performance Requirements f
Source: Item 23 — Receipts (FDD pages 43–157)
What This Means (2025 FDD)
According to All County's 2025 Franchise Disclosure Document, a franchisee's exclusive territory is directly tied to meeting minimum gross revenue requirements. Specifically, if an All County franchisee fails to meet the minimum gross revenue requirements, All County has the right to render all or any portion of the franchisee's protected territory as non-exclusive. This means that All County could allow other franchisees or even the company itself to operate within the territory that was originally granted as exclusive to the franchisee.
The minimum gross revenue requirements are structured in escalating tiers. There is no minimum gross revenue requirement for the initial 365-day period of the franchise agreement. However, for the subsequent 365-day period, the franchisee must achieve a minimum total gross revenue of $150,000. For each consecutive 365-day period thereafter, the minimum total gross revenue requirement increases to $250,000. Failing to meet these revenue targets puts the franchisee at risk of losing the exclusive rights to their territory.
All County does provide a one-time opportunity to cure a failure to meet the minimum gross revenue requirement. A franchisee can avoid being in default by paying the Royalty Fee and Advertising Fund contribution, and by making the local advertising expenditure required under this Agreement, all calculated with reference to the difference between the actual Gross Revenue of the Business for the specified period and the amount of the Requirement for that period. However, if the franchisee fails to meet the requirement a second time, All County may terminate the agreement, effective immediately upon notice, without any further opportunity to cure the default. This underscores the importance of achieving and maintaining the required revenue levels to protect the franchisee's investment and territorial rights.