Is foreclosure upon the All County business considered an assignment?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
- 20.3.6. pledge of this Agreement (to someone other than us) or of an ownership interest in you as security, foreclosure upon the Business or your transfer, surrender or loss of possession, control or management of the Business; or
Source: Item 23 — Receipts (FDD pages 43–157)
What This Means (2025 FDD)
According to All County's 2025 Franchise Disclosure Document, foreclosure upon the business is considered an assignment or transfer of interest in the franchise. Specifically, the FDD states that an assignment, transfer, sale, gift, or other disposition includes the pledge of the Franchise Agreement or of an ownership interest as security, and foreclosure upon the business. Therefore, if a franchisee's All County business is foreclosed upon, it is treated as an assignment or transfer under the terms of the Franchise Agreement.
This means that if a franchisee's business faces foreclosure, All County would likely consider it a transfer of ownership. As such, the franchisee would need to obtain All County's approval, which is conditioned on the prospective transferee agreeing to sign All County's then-current franchise agreement and meeting their qualifying conditions and requirements. All County states that they will not unreasonably withhold the approval of a prospective franchisee.
This provision protects All County by ensuring that any transfer of the franchise, even through foreclosure, is subject to their approval. This allows All County to maintain control over who operates an All County franchise and ensures that the new operator meets their standards. For a potential franchisee, this highlights the importance of financial stability and careful management to avoid foreclosure, as it triggers the assignment provisions of the agreement.