What is the exception to the rule that an All Team franchisee cannot sell collateral?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Use and Sale of Collateral.
Debtor shall use the Collateral only in the ordinary course of business and shall not sell, lease, or otherwise dispose of the Collateral without the prior written approval of Secured Party, except that Debtor may dispose of Inventory in the ordinary course of business at fair market value prices.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to the 2025 All Team Franchise Disclosure Document, All Team franchisees are generally prohibited from selling, leasing, or disposing of collateral without prior written approval from All Team. However, there is an exception to this rule.
The exception allows All Team franchisees to dispose of inventory in the ordinary course of business, provided it is done at fair market value prices. This means a franchisee can sell their standard stock of goods as part of their regular business operations without needing specific permission each time.
This exception is important for the day-to-day operations of an All Team franchise, as it allows franchisees to manage their inventory and generate revenue without undue restrictions. However, it's crucial to note that this exception only applies to inventory sold at fair market value in the normal course of business. Any other disposal of assets, such as selling equipment or fixtures, would still require written approval from All Team.