According to the All Team FDD, what is the purpose of a 'Customer Adjustment'?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
the business which will be owned and operated by FRANCHISEE pursuant to this Agreement.
- B. "ATFC agency" means the Agency and any other staffing agency operating under the System and Marks, whether owned by ATFC or any affiliate, or licensed or franchised by ATFC or any affiliate.
- C. "Customer Adjustment" means any amount of credit or refund which FRANCHISEE issues to a customer due to a customer complaint that is reasonably necessary to maintain customer relations. Customer Adjustment does not include bad debts or uncollectible accounts which are FRANCHISEE's sole responsibility.
- D. "FRANCHISEE" shall be deemed to include: (a) those persons and their spouses owning any interest in a corporate franchisee or a limited liability company; (b) all partners and their spouses owning any interest in a partnership franchisee;
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, a 'Customer Adjustment' refers to any credit or refund that an All Team franchisee issues to a customer. This adjustment is made in response to a customer complaint and is deemed reasonably necessary to maintain positive customer relations.
For a prospective All Team franchisee, understanding the scope and limitations of customer adjustments is crucial. These adjustments directly impact the franchisee's gross billings, as they are deducted from both Temporary Employment Gross Billings and Permanent Placement Gross Billings. This means that while resolving customer issues, franchisees must also carefully manage these adjustments to avoid negatively affecting their revenue.
It's important to note that 'Customer Adjustments' specifically exclude bad debts or uncollectible accounts. The FDD clearly states that bad debts and uncollectible accounts are the sole responsibility of the franchisee, meaning the franchisee cannot use 'Customer Adjustments' to offset losses from unpaid invoices or similar financial risks. This distinction highlights the importance of franchisees implementing sound credit and collection practices to minimize bad debts, as these cannot be resolved through customer adjustments.