What is the consequence if an All Team franchisee assigns the Funding Agreement without consent?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
- E. Assignment. This Funding Agreement is personal to USER and shall not be assignable or transferable by USER, in whole or in part, either voluntarily or by operation of law, except with the prior written consent of ATFC with a copy to Centennial, which consent shall not unreasonably be withheld.
For all purposes of this Funding Agreement, the transfer of the majority of the equity of USER to persons other than the present owners thereof, or of any substantial portion of the Business in one or more transactions, shall be deemed an assignment of this Funding Agreement requiring such consent.
Any assignment must be in conjunction with a corresponding assignment under the Franchise Agreement and the Processing Agreement.
This Funding Agreement is fully assignable by ATFC.
Source: Item 23 — RECEIPT (FDD pages 34–161)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, the Funding Agreement is personal to the franchisee (referred to as USER) and cannot be assigned or transferred without the prior written consent of All Team. This restriction applies whether the assignment is voluntary or occurs by operation of law. However, All Team's consent cannot be unreasonably withheld.
Furthermore, the transfer of a majority of the franchisee's equity to new owners, or the transfer of a substantial portion of the business in one or more transactions, is considered an assignment of the Funding Agreement. This also requires All Team's prior written consent.
Any assignment of the Funding Agreement must occur alongside a corresponding assignment of both the Franchise Agreement and the Processing Agreement. The FDD does not explicitly state the consequences of assigning the Funding Agreement without All Team's consent, but it is implied that such an unapproved assignment would be a breach of the Funding Agreement. A breach of contract could expose the franchisee to legal and financial repercussions, including potential termination of the Funding Agreement and associated agreements.