What expenses can be charged to the separate account when All Team operates the franchise business?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
- E. Operation of Franchise Because of FRANCHISEE's Inability. In order to prevent any interruption of the franchise business which would cause harm to the business, if FRANCHISEE is unable to operate the business for any reason whatsoever, FRANCHISEE authorizes ATFC and its agents and affiliates to operate the business for so long as ATFC deems necessary and practical. All income from the operation of the business shall be kept in a separate account, and the expenses of the business, including reasonable compensation and expenses of ATFC and its agents, shall be charged to said account. Nothing contained herein shall be construed to require ATFC to operate the business in the case of FRANCHISEE's inability to operate same, and the rights set forth herein may be exercised in the sole and absolute discretion of ATFC.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, if a franchisee is unable to operate their All Team franchise for any reason, All Team has the option to step in and operate the business. To ensure transparency, all income generated during this period will be kept in a separate account.
From this separate account, All Team can cover the expenses of running the business. This includes reasonable compensation for All Team and its agents for managing the business during the franchisee's absence. Additionally, any other expenses incurred while operating the business will also be charged to this account.
This arrangement protects both All Team and the franchisee. It ensures the business continues to operate smoothly and that all financial transactions are properly accounted for during the period when the franchisee is unable to manage the business. However, All Team is not obligated to operate the business.