Does the All Team franchise agreement require franchisees to comply with the terms of the agreement to be protected from All Team operating a competing agency in their area?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
Subject to the terms and conditions of this Agreement, ATFC hereby grants to FRANCHISEE the right and license to use the Systems and Marks in connection with the operation of one Agency in the Area described in Exhibit I ("Area") under the terms and conditions of this Agreement.
Subject to Section II.C (National/Regional Accounts), ATFC agrees that during the term of this Agreement, so long as FRANCHISEE is not in default under this Agreement, ATFC shall not operate or license or franchise any other person or entity the right to operate an ATFC agency in the Area. The Agency shall be operated by FRANCHISEE at office which must be located within the limits or boundaries of the Area. FRANCHISEE has the right to select the site of the office for the Agency, subject to the prior written consent of ATFC. FRANCHISEE shall not open or close any office nor change the location of any office within the Area without first securing written consent of ATFC. Notwithstanding the foregoing, if, in ATFC's sole opinion, the Area is too large to service through only 1 office, ATFC may require FRANCHISEE to open additional offices all within the limits or boundaries of the Area. In such event, the number of offices which need to be established in the Area and the timing of establishing these offices will be described in Exhibit I.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, All Team grants the franchisee the right to operate one agency within a defined area, subject to the terms and conditions of the franchise agreement. All Team agrees not to operate or license another agency in the franchisee's area during the agreement's term, provided the franchisee is not in default of the agreement. This protection is contingent upon the franchisee's compliance with the agreement.
This means that as long as the All Team franchisee adheres to all the stipulations within the franchise agreement, All Team will not establish or authorize another competing All Team agency within the franchisee's designated territory. This provides a level of territorial exclusivity, which is a common feature in many franchise systems to protect franchisees' investments and market share. However, this exclusivity is not absolute and depends on the franchisee remaining in good standing with All Team.
It is important to note that the agreement specifies that All Team can require the franchisee to open additional offices within the area if All Team deems the area too large to service with only one office. The number and timing of these additional offices would be detailed in Exhibit I of the franchise agreement. Furthermore, the franchisee must obtain written consent from All Team before opening, closing, or changing the location of any office within their area.
Prospective franchisees should carefully review the definition of 'default' within the franchise agreement to fully understand what actions or omissions could jeopardize their territorial protection. They should also examine Exhibit I to understand any potential requirements for establishing additional offices and the criteria All Team uses to determine if an area is too large to service with a single office. Understanding these conditions is crucial for assessing the viability and potential profitability of an All Team franchise.