What is the extent of the release required from the FRANCHISEE for a transfer of an All Team franchise?
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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- Requirements of Transferee. The transferee meets the established standards for new franchisees, is of good moral character, has a good credit rating, sufficient financial resources to operate the business and competent qualifications. The transferee must execute a new Franchise Agreement which may contain different terms and conditions than this Agreement and a Guaranty and Assumption of Obligations;
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- Transfer Fee. The transferee pays a transfer fee of 50% of the then current Franchise Fee in lieu of the Franchise Fee;
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- Assumption of Liabilities. The transferee agrees to assume all liabilities and obligations from the prior operation of the Agency, including the lease and complies with other reasonable requirements ATFC may impose;
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- Completion of Training. The transferee and/or transferee's management team, including a designated manager, successfully complete the initial training program;
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- Update and Remodel Agency.
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 seeks to transfer their franchise, they, along with all officers, directors, shareholders, and guarantors, must execute a general release. This release, in a form approved by All Team Franchise Corporation (ATFC), covers any and all claims against ATFC, its affiliates, and their respective officers, directors, employees, and agents, to the extent permitted by law. This requirement ensures that upon transfer, All Team is protected from potential future claims arising from the franchisee's prior operation of the business.
The General Release document itself, as outlined in the FDD, is made by the Releasor (the franchisee) for the benefit of All Team Franchise Corporation (the Franchisor). The document acknowledges that the Releasor is an All Team franchisee operating an All Team Agency under a specific franchise agreement. The recitals indicate that the Releasor desires to renew its franchise or seeks the Franchisor's consent in connection with the Franchise Agreement. The document also notes that certain states may require specific changes to the General Release to comply with local laws.
This release is a standard requirement in franchise transfers to protect the franchisor from liabilities associated with the previous franchisee's operation. However, franchisees should carefully review the release with legal counsel to understand the full scope of claims they are waiving. The phrase "to the extent permitted by law" suggests there may be some legal limitations on the breadth of the release, varying by jurisdiction. Franchisees should also be aware that Minnesota Rules 2860.4400(D) prohibits a franchisor from requiring a franchisee to assent to a general release, so this requirement may not be enforceable in Minnesota.