What happens if payments from the All County franchisee to All County are set aside?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
The obligations of Franchisee and Guarantor, as described herein and in the Agreement, shall not be considered fully paid, performed and discharged unless and until all payments by Franchisee to us are no longer subject to any right on the part of any person to set aside such payments or to seek to recoup the amount of such payments. The foregoing shall include, by way of example and not by way of limitation, all rights to recover preferences voidable under Title 11 of the United States Code. If any such payments by Franchisee to us are set aside in whole or in part after being made, or are settled without litigation, to the extent of such settlement, all of which is in our business judgment, the Guarantor shall be liable, jointly and severally for the full amount of our costs, interest, attorney's fees and any and all expenses which we pay or incur in connection therewith.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to All County's 2025 Franchise Disclosure Document, the obligations of the franchisee and guarantor are not considered fully paid until all payments to All County are no longer subject to any right to be set aside or recouped. This includes rights to recover preferences voidable under Title 11 of the United States Code.
If any payments made by the All County franchisee to All County are set aside, either in whole or in part, or are settled without litigation, the guarantor will be liable for the full amount of All County's costs, interest, attorney's fees, and any expenses incurred in connection with the matter. The determination of whether to settle is at All County's discretion.
This clause protects All County from potential losses if a franchisee's payments are later reclaimed due to legal or financial issues. It also ensures that the guarantor remains responsible for covering All County's associated costs in such cases. Prospective franchisees should understand that even after making payments, there is a risk of further financial obligations if those payments are later challenged and that the guarantor is responsible for these costs.