What is the effect of the All Team USER's sale and assignment of Customer Invoices to ATFC?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
USER's sale and assignment of Customer Invoices to ATFC grants ATFC all of USER's rights, securities, guaranties and liens with respect to each Customer Invoice and all of USER's defenses and rights of offset with respect to any payments received by ATFC.
These Customer Invoices, as a result of the sale to ATFC, become the accounts receivable of ATFC ("Accounts Receivable") and therefore ATFC shall not be obligated to, and shall not be liable for, exercising or refusing to exercise any rights granted to ATFC hereby.
USER shall execute and deliver to ATFC assignments of the Customer Invoices, which will include, without limitation, copies of all original invoices, copies of the bills of lading, proofs of delivery, contracts or purchase orders, and/or purchase order numbers which correspond with such Customer Invoices, and time tickets or other proofs of service as may be required by ATFC.
USER shall send the foregoing documentation to ATFC no later than noon Wednesday following the previous week.
- D. Purchase Price.
The purchase price of each purchased Customer Invoice (the "Purchase Price") shall be Eighty percent (80%) of such Customer Invoice, less: (i) Funding Fee (as defined below); (ii) out-of-pocket expenses incurred by ATFC on behalf of USER; (iii) any adjustments for Late Accounts or Delinquent Accounts; (iv) any discounts made available or extended to the Customer; and (v) Continuing License Fee, Advertising Fund Fee, Technology Fees, Processing Fees and any other amounts due to ATFC as required under the Franchise Agreement and the Processing Agreement.
The Purchase Price is guided by the Centennial Agreement referred to herein.
Notwithstanding the foregoing, in the event that the Centennial Agreement is reduced, the 80% can be reduced accordingly.
ATFC shall send USER the Purchase Price no later than the Friday of each week following the Sunday close of the preceding week.
USER must deposit these funds in its account in order to have adequate funds to cover the checks ATFC will prepare in accordance with the Processing Agreement.
The difference between the Account Receivable and the Purchase Price percentage is called the "Deferred Share".
Source: Item 23 — RECEIPT (FDD pages 34–161)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, when a USER (franchisee) sells and assigns Customer Invoices to ATFC (All Team Franchise Corporation), ATFC gains all of the USER's rights, securities, guarantees, and liens related to each Customer Invoice. ATFC also obtains all of the USER's defenses and rights of offset concerning any payments ATFC receives. This transfer means the Customer Invoices become ATFC's accounts receivable. As a result, ATFC is not obligated or liable for exercising or not exercising any rights associated with these invoices.
In practice, this means that All Team franchisees transfer the responsibility and rights to collect payments from customers to ATFC. The franchisee must provide ATFC with all necessary documentation, including original invoices, bills of lading, proofs of delivery, contracts or purchase orders, and time tickets, by noon on Wednesday following the previous week. This allows ATFC to manage the collection process and handle any related issues.
The purchase price that the All Team franchisee receives for each Customer Invoice is 80% of the invoice amount, less several deductions. These deductions include a Funding Fee, any out-of-pocket expenses ATFC incurs on behalf of the franchisee, adjustments for late or delinquent accounts, discounts extended to the customer, and various fees like Continuing License Fee, Advertising Fund Fee, Technology Fees, and Processing Fees. ATFC sends the Purchase Price to the USER by the Friday of each week following the Sunday close of the preceding week, and the USER must deposit these funds to cover checks prepared by ATFC according to the Processing Agreement. The difference between the Account Receivable and the Purchase Price percentage is called the "Deferred Share".
This arrangement allows All Team to manage the financial aspects of the invoices, while the franchisee focuses on the core business operations. However, the franchisee should be aware of the deductions from the purchase price and the potential for adjustments due to late or delinquent accounts, which can impact their revenue.