Can All Team change the Funding Fee, and if so, what are the limitations?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
bsequent violation.
Note 3- Funding Fee. You are required to obtain payroll funding from us. Currently we are the only approved payroll funding source for our franchisees. Attached as Exhibit C is a copy of the Funding Agreement you must sign in order to obtain payroll funding from us. Under the Funding Agreement, we purchase your customer invoices ("Customer Invoice(s)") which then become our "Accounts Receivables". The Funding Fee is subject to change upon written notification to you, however we will not change it more often than once a year. Upon the termination of the Funding Agreement, we also have the right to withhold up to $10,000 in customer payments for a period of 12 months that we can use to offset any unpaid receivables or c
Source: Item 6 — OTHER FEES\ (FDD pages 10–13)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, the Funding Fee is subject to change. The document specifies that All Team is currently the only approved payroll funding source for franchisees, and franchisees are required to obtain payroll funding from them. The Funding Fee, which is initially 1.5% of the Customer Invoice amount, can be increased by All Team. However, All Team can only change the Funding Fee upon written notification to the franchisee, and they will not change it more often than once a year.
This means that while All Team franchisees must use All Team for payroll funding, the cost of this funding (the Funding Fee) is not fixed. All Team retains the right to adjust this fee, which could impact a franchisee's profitability. The limitation of one change per year provides some predictability, but franchisees should still be aware that their funding costs could increase.
Additionally, upon termination of the Funding Agreement, All Team has the right to withhold up to $10,000 in customer payments for a period of 12 months. This withheld amount can be used to offset any unpaid receivables or customer chargebacks. This could affect the franchisee's cash flow at the end of the agreement. Prospective franchisees should carefully review the Funding Agreement (Exhibit C) to fully understand the terms and conditions related to the Funding Fee and the handling of customer payments upon termination.