For an All Team franchise, what happens if a Default occurs?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
ates or suppliers; failure of FRANCHISEE to open the Agency for business within four (4) months after ATFC's acceptance of this Agreement or failure of FRANCHISEE to operate both the Permanent Placement Business and Temporary Service Business within four (4) months after FRANCHISEE signed this Agreement. If termination is based on the foregoing, the FRANCHISEE shall be entitled to written notice of default, but ATFC shall [if permitted by applicable law] be required to grant FRANCHISEE only ten (10) days to remedy such default. ATFC has the right to termination this Agreement upon providing FRANCHISEE written notice of said termination.
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- Without Opportunity to Cure. Notwithstanding anything contained herein to the contrary, if state law permits, ATFC shall be permitted to terminate the franchise immediately and without notice when the basis or grounds for cancellation is: (a) conviction of a felony or any other criminal misconduct which, in ATFC's opinion materially and adversely affects the operation, maintenance, reputation, or goodwill of the franchise; (b) fraudulent activity which, in ATFC's opinion, materially and adversely affects the operation, maintenance, reputation, or goodwill of the franchise; (c) abandonment of the franchise; (d) bankruptcy or insolvency of the FRANCHISEE; (e) the termination of any other agreement between FRANCHISEE and ATFC or its affiliates; (f) repeated failure or refusal to comply with the lawful provisions of this Agreement, (i.e., three (3) or more times in any twelve (12) month period) whether or not such failures or refusals are corrected after notice; or (g) any other act or omission which permits termination without notice and/or an opportunity to cure under applicable state law.
- B. Termination By FRANCHISEE. FRANCHISEE may terminate this Agreement if ATFC shall materially default in performance of any terms and conditions in this Agreement, after giving ATFC written notice within thirty (30) days thereof, and if the default has not been corrected within thirty (30) days after such notice, or if such default is incapable of being cured within thirty (30) days, such longer period of time as is necessary to cure such default, provided that ATFC has commenced curing such default within said thirty (30) day period and diligently pursues a cure.
- C. Consequences of Termination. Upon termination or expiration of this Agreement, for any reason whatsoever, all of FRANCHISEE's rights hereunder shall terminate. FRANCHISEE shall immediately thereafter discontinue use of all Marks, signs, colors, structures, printed goods and forms of advertising indicative of ATFC's business and return any copyrighted materials which have been provided to FRANCHISEE by ATFC, and if ATFC requests, shall assign its telephone numbers to ATFC, clients, candidates, customers and the employee roster and execute any and all documents necessary to do so. FRANCHISEE will immediately cease providing services to all customers and candidates and forfeit 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.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, the consequences of default by the franchisee can vary. Generally, All Team provides a written notice of default and, if permitted by applicable law, only allows ten days to remedy the default. However, All Team can terminate the franchise agreement immediately without notice under certain conditions if state law permits. These conditions include conviction of a felony, fraudulent activity, abandonment of the franchise, bankruptcy or insolvency of the franchisee, termination of any other agreement between the franchisee and All Team, repeated failure to comply with the agreement (three or more times in a 12-month period), or any other act that allows termination without notice under state law.
If All Team materially defaults, the franchisee must provide written notice within 30 days. All Team then has 30 days to correct the default, or a longer period if the default cannot be cured within 30 days, provided All Team starts curing the default within the initial 30-day period and diligently pursues a cure. Upon termination or expiration of the agreement for any reason, all of the franchisee's rights under the agreement terminate.
Additionally, good cause for termination exists if the franchisee does not substantially perform the terms of the agreement, loses possession of the premises and fails to secure a suitable relocation site within three months, defaults under the lease, misrepresents billings, loses a necessary permit or license for five days, misuses the Marks or confidential information, is adjudged bankrupt or insolvent, commits any act constituting good cause under state law, or fails to provide timely reports.
It is important for a prospective All Team franchisee to understand the specific conditions that constitute a default and the remedies available to both the franchisor and franchisee in the event of a default. Understanding these provisions is crucial for protecting their investment and ensuring compliance with the franchise agreement.