Besides the renewal fee, what other obligations does an All Team franchisee have when renewing the franchise?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
If FRANCHISEE is in full compliance with the terms of this Agreement, FRANCHISEE shall have the right to renew for two additional terms of ten (10) years, provided that FRANCHISEE is not in default under this Agreement at the time of renewal and agrees to execute the most current franchise agreement being utilized by ATFC. The most current franchise agreement may contain significantly different terms than this Agreement. Notwithstanding the foregoing, ATFC may, in its discretion, refuse to renew the Franchise if FRANCHISEE has been notified of defaults (even if subsequently cured) under this Agreement more than three (3) times during the initial term or more than three (3) times during any renewal term, even if FRANCHISEE is not in default at the time of such renewal. FRANCHISEE agrees to give ATFC not less than six (6) or more than eighteen (18) months written notice of an election to renew the franchise, prior to the end of the initial term or the renewal term. Failure to give such notice shall be an election not to renew the franchise. FRANCHISEE shall also pay ATFC a renewal fee of 25% of the then current Franchise Fee, remodel the Agency to current standards and execute a general release, to the extent permitted by applicable law, of any and all claims against ATFC and its affiliates and their respective shareholders, officers, directors, employees, agents, successors and assigns arising under or from this Agreement and any related agreement between the parties or under any applicable law, rule or regulation.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, a franchisee seeking to renew their franchise agreement must fulfill several obligations beyond paying the renewal fee. The franchisee must not be in default under the existing agreement at the time of renewal. They are also required to execute the most current franchise agreement, which All Team notes may contain significantly different terms than the original agreement. Franchisees must provide written notice of their intent to renew, no less than six months and no more than eighteen months before the end of the current term.
In addition to these conditions, the franchisee is obligated to remodel the agency to meet All Team's current standards at the time of renewal. They must also execute a general release, to the extent permitted by law, releasing All Team from any and all claims against them and their affiliates. However, All Team retains the discretion to refuse renewal if the franchisee has been notified of defaults more than three times during the initial or any renewal term, even if these defaults have been subsequently resolved and the franchisee is not in default at the time of renewal.
These renewal conditions highlight the importance of maintaining compliance with the franchise agreement throughout its term. The potential for changes in the new franchise agreement and the remodeling requirement also mean that franchisees should carefully consider the financial implications of renewal. The general release further underscores the need for franchisees to resolve any disputes with All Team well in advance of the renewal process.