For All Team, what is the consequence if the franchisee breaches any warranties or representations in the agreement?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
**IX.
Warranties and Representations**.
USER warrants and represents that (a)USER is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation and agrees that it shall not change such state or jurisdiction of incorporation without giving ATFC sixty (60) days prior written notice of such change, (b)USER is duly qualified to do business and in good standing in each other jurisdiction where its ownership of property or the conduct of its business requires such qualification, except where the failure to be so qualified could not reasonably be expected to have a material adverse effect on USER's business or assets, (c)USER operates its Business in material compliance with all applicable local, state and federal laws, including without limitation the Fair Labor Standards Act and all applicable tax withholding laws and regulations, and (d) each purchased Account Receivable: (i) is genuine and valid and represents a completed delivery or performance in fulfillment in every respect of the terms, conditions and specifications of a bona fide, un-canceled and unexpired sale or service in the ordinary course of business to a Customer which is not affiliated with USER in full compliance with the specifications of such Customer; (ii) is enforceable for the full amount thereof and shall at the time submitted to ATFC be subject to no Dispute; (iii) is free of all security interests, liens and encumbrances except for the lien granted to ATFC under this Funding Agreement or the Security Agreement; and (iv) is payable in United States Dollars and has been invoiced to the Customer by an invoice that bears notice of the sale and assignment to ATFC in compliance with the terms of this Funding Agreement.
X. Termination.
- A. Default by USER. In the event of a breach of any of the terms of this Funding Agreement by USER, if the breach is not cured within ten (10) days of written notice to USER specifying the nature of such breach, ATFC may, in addition to pursuing any other remedies it may have, at its election, suspend its performance hereunder until the breach is cured or terminate this Agreement.
Source: Item 23 — RECEIPT (FDD pages 34–161)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, if a franchisee (referred to as USER in the Processing Agreement) breaches any terms of the Processing Agreement, including warranties and representations, All Team Franchise Corporation (ATFC) will provide a written notice specifying the breach. The franchisee then has ten days to correct the breach. If the franchisee fails to fix the breach within this period, ATFC has the option to suspend its performance under the agreement or terminate the Processing Agreement, in addition to pursuing other available remedies.
Furthermore, if the franchisee commits the same or a similar breach twice within a twelve-month period, even if the franchisee cures the breaches, ATFC has the right to terminate the Processing Agreement immediately upon written notice, without providing an opportunity to cure the second breach. Additionally, upon the termination or expiration of the Franchise Agreement for any reason, ATFC can immediately terminate the Processing Agreement with written notice to the franchisee.
These stipulations highlight the importance of franchisees adhering to the terms and conditions outlined in the Processing Agreement and Franchise Agreement. The consequences of breaching warranties or representations can lead to suspension of services or termination of the agreement, potentially disrupting the franchisee's business operations. The franchisee must also comply with all applicable governmental laws, rules, and regulations, as well as the Franchise Agreement itself, and maintain worker's compensation insurance, providing proof of such insurance to ATFC upon request.
It is important to note that these consequences relate specifically to the Processing Agreement. The FDD does not detail the consequences for breaches of warranties and representations in the Franchise Agreement itself. A prospective franchisee should carefully review the Franchise Agreement and seek clarification from All Team regarding the specific ramifications of breaching warranties and representations within that agreement.