Is diverting or collecting fees from customers by an All Team franchisee a prohibited action?

According to All Team's 2025 Franchise Disclosure Document, after the termination, expiration, or transfer of the Franchise Agreement, a franchisee is prohibited from diverting or appropriating customers to a similar business. Specifically, for two years after the agreement ends, the franchisee cannot solicit or service for, or divert or appropriate to any similar business, any person or entity which is or was at any time during the preceding two-year period a customer of the franchisee, All Team, or any affiliate, licensee, or franchisee of All Team. This restriction applies unless the franchisee obtains prior written consent from All Team.

This non-compete clause is designed to protect All Team's customer relationships and prevent former franchisees from unfairly leveraging their knowledge and connections gained during their time with the franchise. The geographical scope of this restriction covers the area of the agency and the area of any other All Team agency, whether operated by All Team, an affiliate, a licensee, or another franchisee. This broad coverage ensures that the franchisee cannot simply move to a nearby location to circumvent the non-compete agreement.

For a prospective franchisee, this clause highlights the importance of understanding the terms of termination and the limitations placed on their business activities after leaving the All Team system. It is crucial to consider the potential impact of this non-compete agreement on their future business plans and to seek legal advice to fully understand their rights and obligations. The franchisee should also be aware that violating this clause could result in legal action by All Team to enforce the terms of the agreement.