In the All Team agreement, what happens to amounts collected by the Secured Party as attorney-in-fact?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
Debtor appoints Secured Party as Debtor's attorney-in-fact with full power and authority, to endorse and collect all drafts, checks, or other instruments or items that are payable to Debtor that come into the possession of Secured Party and apply all amounts collected to the Liabilities.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, if the Secured Party acts as the Debtor's attorney-in-fact, they have the authority to endorse and collect drafts, checks, or other instruments payable to the Debtor. All amounts collected through this power of attorney are applied to the Debtor's liabilities.
This means that All Team has the right to collect payments due to the franchisee and directly apply those funds to any debts or obligations the franchisee owes to All Team. This arrangement provides All Team with a direct mechanism to recover outstanding amounts, potentially avoiding lengthy collection processes.
For a prospective All Team franchisee, this clause highlights the importance of maintaining good financial standing with the franchisor. Failure to meet financial obligations could result in All Team exercising its power of attorney, directly intercepting payments that would otherwise go to the franchisee. Franchisees should ensure they understand the full scope of their financial obligations and the potential consequences of default.