What is the consequence if an All Team franchisee sells unauthorized services?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
ice through only 1 office, ATFC may require FRANCHISEE to open additional offices all within the limits or boundaries of the Area. In such event, the number of offices which need to be established in the Area and the timing of establishing these offices will be described in Exhibit I.
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- Operations of Temporary Service Business. FRANCHISEE must operate the Temporary Service Business solely within the Area. FRANCHISEE may service customers even if the corporate office of a customer is located outside of the Area so long as the services to be provided for the customer will be located in the Area. If a customer wishes FRANCHISEE to provide services outside of the Area, FRANCHISEE shall immediately refer said customer to the agency office that services that area. If the customer is not referred to the agency office that services that area, FRANCHISEE will be charged a fine of $1,000 for the first violation, $2,500 for the second violation, and $5,000 for the third and each subsequent violation. ATFC has the right to collect these amounts in addition to exercising any and all other rights it may have for non-compliance under this Agreement. In addition, FRANCHISEE will be required to pay restitution of the profit FRANCHISEE derived from the wrongfully-performed services to the agency that services that area, as applicable. If the agency office that services that area waives the right to service that customer, in writing, FRANCHISEE may service that customer
Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD page 28)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, franchisees must only offer services detailed in the Confidential Operations Manual. If an All Team franchisee provides services outside their designated territory, they will be fined $1,000 for the first violation, $2,500 for the second, and $5,000 for the third and any subsequent violations.
In addition to these fines, the franchisee must also provide restitution to the All Team agency that services the correct area, which includes paying the profits earned from the unauthorized services. However, if the agency that services the area gives written permission, the franchisee may provide services outside of their designated area.
These penalties and requirements are designed to protect the integrity of the All Team brand and ensure that franchisees operate within their designated areas, preventing overlap and competition between franchisees. Prospective franchisees should carefully review the Confidential Operations Manual to understand the scope of authorized services and the boundaries of their territory to avoid these penalties.