What financial obligations does an All Team franchisee have upon termination of the agreement?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
t any rights it may have to the customers, candidates and any customer accounts. Upon request of ATFC, FRANCHISEE will assign to ATFC any or all of FRANCHISEE'S customer contracts and candidates and ATFC will have the right to either service the accounts or assign the servicing of the accounts to others. Further, FRANCHISEE shall pay all amounts due to ATFC, ATFC's affiliates, and suppliers. Further, FRANCHISEE agrees to return any and all materials which contain Confidential Information in whatever form, including but not limited to the Confidential Operating Manual, to ATFC immediately. FRANCHISEE shall cancel any assumed name registration or equivalent registration obtained by FRANCHISEE which contains the Marks and FRANCHISEE shall furnish ATFC with evidence satisfactory to ATFC of compliance with this obligation within 5 days of the termination, expiration or Transfer. ATFC reserves the right to conduct a post termination audit to confirm the accuracy of financial reporting, receivables, and compliance with client requirements. In addition, ATFC will withhold up to $10,000 in customer payments pending the result of the audit, or for up to 12 months after termination, as a reserve for unpaid receivables and customer chargebacks.
Upon ATFC's request, FRANCHISEE shall assign to ATFC any interest that FRANCHISEE may have in any lease or sublease for the Agency. ATFC may exercise the option at or within thirty (30) days after either termination or expiration of this Agreement or within thirty (30) days of notice by FRANCHISEE's landlord of its intent to terminate the lease or sublease.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, upon termination of the franchise agreement, a franchisee has several financial obligations. The franchisee must pay all outstanding amounts due to All Team, its affiliates, and suppliers. Additionally, All Team reserves the right to conduct a post-termination audit to verify the accuracy of financial reporting, receivables, and compliance with client requirements.
All Team may withhold up to $10,000 in customer payments pending the outcome of the audit or for up to 12 months after termination. This withheld amount serves as a reserve for unpaid receivables and customer chargebacks. This means that a franchisee might not receive all pending customer payments immediately upon termination, as All Team can hold a portion for a specified period to cover potential financial discrepancies.
Furthermore, if All Team chooses to purchase the franchisee's equipment, inventory, supplies, and other personal property used in the business operation (excluding personal effects of sentimental value), the franchisee will receive fair market value for these items, less any existing liens on the property. The fair market value will be determined by independent appraisals if the parties cannot agree on a price. The franchisee is responsible for cooperating with the appraisal process to determine the value of the assets being sold back to All Team.