What happens if the All County franchisee terminates the agreement without cause?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
- 22.1.2. Other Termination Only By Operation of Law. You acknowledge and agree that other than the sole termination exception identified in Article 22.2.1 above, you and your owners may not terminate this Agreement except by operation of law. Your termination of this Agreement for any other reason or without availing yourself of legal redress will be deemed a termination without cause.
23.6. Our Rights to Purchase the Business.
- 23.6.1. Exercise of Option. Upon termination or expiration of this Agreement in accordance with its terms and conditions or your termination of this Agreement without cause, we have the option, exercisable by giving written notice to you within sixty (60) days from the date of such termination or expiration, to purchase the Business from you, including the leasehold rights to the Location, free and clear of all liens, restrictions or encumbrances. (The date on which we notify you whether or not we are exercising our option is referred to in this Agreement as the "Notification Date.") We have the unrestricted right to assign this option to purchase the Business. We will be entitled to all customary warranties and representations in connection with our asset purchase, including, without limitation, representations and warranties as to ownership and condition of and title to assets; liens and encumbrances on assets; validity of contracts and agreements; and liabilities affecting the assets, contingent or otherwise.
- 23.6.2. Leasehold Rights. You agree, at our election, to assign your leasehold interest in the Location to us or, to enter into a sublease for the remainder of the lease term on the same terms (including renewal options) as the prime lease.
- 23.6.3. Purchase Price. The purchase price for the Business will be its fair market value, determined in a manner consistent with reasonable depreciation of the Business' equipment, signs, inventory, materials and supplies, provided that the Business will be valued as an independent business and its value will not include any value for the Franchise or any rights granted by this Agreement; the Marks; or participation in the network of ALL COUNTY® businesses. The length of the remaining term of the lease for the Location will also be considered in determining the Business' fair market value.
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 terminates the agreement without cause, it is considered a breach of contract with specific repercussions. The franchisee acknowledges that, apart from the sole termination exception within 365 days of the agreement's effective date, they cannot terminate the agreement except by operation of law. Any other termination is deemed without cause.
Upon such termination without cause, All County has the option to purchase the business from the franchisee. This option is exercisable by providing written notice within 60 days from the termination date. The purchase includes the leasehold rights to the location, free of any liens or encumbrances. All County also has the unrestricted right to assign this purchase option to another party.
In the event All County exercises its option to purchase the business, the purchase price will be the fair market value of the business, determined by considering reasonable depreciation of equipment, signs, inventory, materials, and supplies. However, the valuation excludes any value associated with the All County franchise itself, the brand's marks, or participation in the All County network. The remaining term of the location's lease will also factor into determining the fair market value. This ensures that the franchisee is compensated for the tangible assets of the business, while All County retains control over its brand and franchise system.