Can an All County franchisee pledge the franchise agreement to us?

According to All County's 2025 Franchise Disclosure Document, franchisees are restricted from pledging the franchise agreement to outside parties without the franchisor's consent. Specifically, Item 20.3.6 states that a "pledge of this Agreement (to someone other than us) or of an ownership interest in you as security" is considered an assignment that requires All County's prior written approval. Any transfer or assignment without this approval is considered a breach of the agreement and is void.

This provision protects All County by ensuring they maintain control over who operates a franchise under their brand. By requiring approval for any pledge or assignment, All County can vet potential new operators and ensure they meet the company's standards. This helps maintain consistency and quality across all franchise locations.

For a prospective franchisee, this means that you cannot use the franchise agreement itself as collateral for a loan from a third party without All County's explicit permission. If you need financing, you'll likely need to explore other options or seek approval from All County, which may involve meeting certain conditions or requirements. It is important to discuss financing options and transfer conditions with All County during your due diligence to fully understand the implications.

It is fairly common in franchising to restrict the transfer or pledging of franchise agreements. Franchisors want to carefully control who is operating under their brand name. This clause is in place to protect the All County brand and maintain standards across all franchise locations.