What events related to insolvency or bankruptcy would constitute a default under the All Team agreement?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
Without limitation as to other situations, good cause for termination also exists if FRANCHISEE or any guarantor of this Agreement:
- (6) Is adjudged bankrupt, becomes insolvent, or makes a general assignment for the benefit of creditors (subject to Section XII.A.3.(d) below); or
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, several events related to insolvency or bankruptcy can trigger a default under the franchise agreement. These include the franchisee being adjudged bankrupt, becoming insolvent, or making a general assignment for the benefit of creditors.
These conditions are fairly standard in franchise agreements, as the financial stability of the franchisee is crucial to the ongoing operation and reputation of the All Team franchise. A franchisee's bankruptcy or insolvency could negatively impact their ability to meet financial obligations to All Team, maintain the standards of the franchise, and provide services to customers.
It's important to note that the FDD specifies that these conditions are 'subject to Section XII.A.3.(d) below,' suggesting there may be additional stipulations or exceptions related to bankruptcy or insolvency that a prospective franchisee should carefully review. Additionally, the agreement allows All Team to terminate the franchise immediately and without notice if state law permits in the event of the franchisee's bankruptcy or insolvency.