What conditions might ATFC place on the specification of a supplier for All Team franchisees?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
FRANCHISEE shall purchase and/or lease all products, services, supplies, computer software and hardware, equipment and materials required for the operation of the business from manufacturers, suppliers, or distributors designated by ATFC, or from other suppliers who meet ATFC's specifications and are able to provide products and equipment in accordance with the standards as to quality, appearance and service, and who adequately demonstrate their ability to supply the franchise needs in a timely and reliable manner. Specification of a supplier may be conditioned on requirements relating to, among other things, frequency of delivery, standards of services, including prompt attention to complaints, as well as payments, contributions, or other consideration to ATFC or its affiliates, any advertising fund and/or otherwise, and may be temporary, in each case in ATFC's reasonable discretion. ATFC may, from time-to-time withhold, condition and/or revoke ATFC's approval of particular items or suppliers in its reasonable discretion. ATFC or its affiliates may receive rebates, commissions, promotional allowances and other benefits from suppliers in relation to items purchased by FRANCHISEE and other franchisees. ATFC has the right to condition or revoke Franchisee's right to participate in any supplier programs if FRANCHISEE is in default under this Agreement. Some of the approved suppliers may be affiliated with ATFC.
ATFC may require that samples from other suppliers of any products to be used by FRANCHISEE be delivered to ATFC for testing prior to approval and use. A charge not to exceed the actual cost of the test may be made by ATFC or by an independent testing laboratory designated by ATFC and shall be paid by FRANCHISEE. ATFC shall advise FRANCHISEE within a reasonable period of time of its approval or disapproval of alternate sources of products, services, supplies, suppliers, materials and equipment. The foregoing shall not be construed as an attempt to unreasonably limit the sources from which FRANCHISEE may procure its products, services, supplies and materials. Rather, it is the intention of ATFC that such items conform to ATFC's strict standards and strict specifications as to consistent quality, uniformity and reliability. Further, ATFC shall not be required to approve an inordinate number of suppliers of a given item which in the reasonable judgment of ATFC would prevent effective supervision of suppliers by ATFC.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, All Team franchisees must acquire all products, services, supplies, software, hardware, equipment, and materials from ATFC-designated manufacturers, suppliers, or distributors, or from suppliers meeting ATFC's standards.
ATFC may condition the specification of a supplier on requirements related to the frequency of delivery, service standards (including addressing complaints promptly), and payments, contributions, or other considerations to ATFC or its affiliates, any advertising fund, or other factors. These conditions can be temporary and are subject to ATFC's reasonable discretion. All Team retains the right to withhold, condition, or revoke approval of specific items or suppliers as it sees fit.
All Team or its affiliates may also receive financial benefits such as rebates, commissions, and promotional allowances from suppliers based on franchisee purchases. Furthermore, All Team can revoke a franchisee's participation in supplier programs if the franchisee is in default under the Franchise Agreement. Some approved suppliers may be affiliated with All Team, potentially creating a conflict of interest that franchisees should be aware of.
All Team may also require franchisees to submit samples from alternative suppliers for testing before approval. The franchisee will bear the cost of these tests, which will be conducted by All Team or an independent testing laboratory. All Team will then advise the franchisee of its decision regarding the alternative source within a reasonable timeframe. While All Team aims to ensure items meet its standards for quality, uniformity, and reliability, it also states it will not unreasonably limit the number of suppliers, provided that effective supervision of those suppliers is still possible.