Is conviction of a felony a curable or non-curable default for an All Team franchise?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding anything contained herein to the contrary, if state law permits, ATFC shall be permitted to terminate the franchise immediately and without notice when the basis or grounds for cancellation is: (a) conviction of a felony or any other criminal misconduct which, in ATFC's opinion materially and adversely affects the operation, maintenance, reputation, or goodwill of the franchise; (b) fraudulent activity which, in ATFC's opinion, materially and adversely affects the operation, maintenance, reputation, or goodwill of the franchise; (c) abandonment of the franchise; (d) bankruptcy or insolvency of the FRANCHISEE; (e) the termination of any other agreement between FRANCHISEE and ATFC or its affiliates; (f) repeated failure or refusal to comply with the lawful provisions of this Agreement, (i.e., three (3) or more times in any twelve (12) month period) whether or not such failures or refusals are corrected after notice; or (g) any other act or omission which permits termination without notice and/or an opportunity to cure under applicable state law.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 28–30)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, a conviction of a felony is considered a non-curable default. This means that All Team has the right to terminate the franchise agreement immediately and without providing an opportunity for the franchisee to correct the issue. However, this is contingent on state law permitting such termination without notice or an opportunity to cure.
All Team can terminate the franchise immediately if the franchisee is convicted of a felony or any other criminal misconduct that, in All Team's opinion, materially and adversely affects the operation, maintenance, reputation, or goodwill of the franchise. This also applies to situations involving fraudulent activity, abandonment of the franchise, bankruptcy or insolvency of the franchisee, termination of any other agreement between the franchisee and All Team, repeated failure to comply with the franchise agreement, or any other act or omission that permits termination without notice under applicable state law.
For a prospective All Team franchisee, this means that a felony conviction could lead to immediate termination of their franchise agreement. It is important to understand the specific laws in their state regarding franchise termination and the definition of "reasonable cause" for termination, as state laws may provide additional protections. Franchisees should seek legal counsel to fully understand their rights and obligations under the franchise agreement and applicable state laws.