What is considered a 'Customer Adjustment' when calculating gross billings for All Team continuing license fees?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
are nonrefundable.
Note 1 – Continuing License Fees. Temporary Employment Gross Billings means all of the gross billings (less any Customer Adjustments) to customers derived from the Agency's Temporary Service Business. Permanent Placement Gross Billings means all billings from the Agency's Permanent Placement Business, including but not limited to, receipts from job placements, recruiting, conversions of temporary employment and any other similar function or related business, less any Customer Adjustments. "Customer Adjustment" is defined as any amount of credit or refund which you issue to a customer due to a customer complaint that is reasonably necessary to maintain customer relations. Customer Adjustment does not include credit for bad debts or uncollectible accounts which are your sole responsibility. The Minimum Fees are $600 per week for the first year of operations, $950 per week for the second year of operations and $1,250 per week for the remainder of the term of the
Source: Item 6 — OTHER FEES\ (FDD pages 10–13)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, a 'Customer Adjustment' is defined as any amount of credit or refund that an All Team franchisee issues to a customer due to a complaint. This adjustment must be reasonably necessary to maintain customer relations. These customer adjustments are subtracted from the gross billings when calculating the continuing license fees owed to All Team.
It is important to note that not all credits or refunds qualify as 'Customer Adjustments'. Specifically, the definition explicitly excludes credit for bad debts or uncollectible accounts. These remain the sole responsibility of the franchisee and cannot be deducted from gross billings when calculating the continuing license fees. This distinction is important because it clarifies that only adjustments made to resolve customer complaints directly impact the gross billings calculation.
This definition impacts the franchisee because it directly affects the amount of continuing license fees they pay to All Team. By reducing the gross billings with legitimate customer adjustments, the franchisee pays a smaller percentage to All Team. However, franchisees must be careful to properly classify adjustments, as bad debts cannot be used to reduce the gross billings. This ensures that All Team receives the appropriate percentage of revenue and that franchisees are managing their customer relationships effectively.