In the event of a transfer of an All Team franchise, what kind of release must be executed?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
ations and duties under this Agreement and FRANCHISEE is not in default under this Agreement, or any other agreement with ATFC;
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- Payments. The transferee has satisfied all of its obligations to ATFC, ATFC's affiliates and suppliers under this Agreement and all other agreements it has with ATFC;
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- Release. The FRANCHISEE, including all officers, directors and shareholders (as well as all guarantors under this Agreement) must execute a general release, in the form which ATFC approve, of any and all claims against ATFC, ATFC's affiliates, and their respective officers, directors employees and agents, to the extent permitted by law;
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Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to the 2025 All Team Franchise Disclosure Document, in the event of a franchise transfer, the franchisee, including all officers, directors, and shareholders, along with all guarantors, must execute a general release. This release, in a form approved by All Team, covers any and all claims against All Team, its affiliates, and their respective officers, directors, employees, and agents, to the extent permitted by law.
This requirement means that a franchisee selling their All Team business must legally relinquish any existing or future claims against the franchisor as a condition of the transfer. This is a standard practice in franchising, designed to protect the franchisor from potential liabilities arising from the previous franchisee's operation of the business. The release ensures a clean break between the outgoing franchisee and All Team, allowing the new franchisee to start with a fresh relationship.
However, the FDD also notes that if the General Release is connected to a renewal, assignment, or transfer of the Franchise Agreement, the release does not apply to any liability under any state franchise law which governs the Release. Prospective franchisees should carefully review the release document with their legal counsel to fully understand the scope of claims being waived and the implications under applicable state laws. They should also confirm whether the release impacts any rights they may have under franchise laws, especially concerning issues like fraud in the inducement.