What agreement does an All Team franchisee agree to enter into in connection with the execution of the Funding Agreement?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
In connection with the execution of this Funding Agreement, USER agrees to enter into a Security Agreement in the form attached hereto as Exhibit A, which grants to ATFC a security interest in collateral described therein (the "Security Agreement").
USER acknowledges and agrees that ATFC is relying on the representations, warranties and covenants contained in this Section and in the Security Agreement, and any misrepresentation or breach or failure of any thereof shall entitle ATFC to immediately terminate this Funding Agreement.
Source: Item 23 — RECEIPT (FDD pages 34–161)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, in connection with the execution of the Funding Agreement, the franchisee (referred to as USER) agrees to enter into a Security Agreement. This agreement grants All Team a security interest in the collateral described within the Security Agreement itself.
All Team emphasizes that it relies on the representations, warranties, and covenants outlined both in a specific section and within the Security Agreement. Any misrepresentation, breach, or failure related to these aspects entitles All Team to immediately terminate the Funding Agreement.
This requirement ensures that All Team has a secured position in the franchisee's assets, mitigating their financial risk in providing funding. For a prospective franchisee, this means understanding the implications of granting a security interest and ensuring full compliance with the terms of both the Funding Agreement and the Security Agreement to avoid potential termination.