Can an All Team franchisee offer a discount on unauthorized services to attract customers?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
in our sole and absolute discretion at any time.
Operations of Temporary Service Business within Area. You must operate the Temporary Service Business only within the Area. You may service customers even if the corporate office of a customer is located outside of the Area so long you provide the services in the Area. If a customer wants you to provide services outside of the Area, you will immediately refer the customer to the agency office that services that area. If the customer is not referred to the agency office that services that area, you will be charged a fine of $1,000 for the first violation, $2,500 for the second violation and $5,000 for the third and each subsequent violation. In addition, you will be required to pay restitution of the profit you derived from the wrongfullyperformed services to the agency that services that area, as applicable. If the agency office that services that area waives the right to service that customer, in writing, you may service that customer outside of your area. If neither we nor any of our affiliates, nor any other franchisee provide services in the customer's area, you may provide temporary services to that customer. You will provide only the temporary service
Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD page 28)
What This Means (2025 FDD)
Based on the 2025 FDD, the All Team franchise agreement stipulates that franchisees must operate their temporary service business and permanent placement business solely within their designated area. If a franchisee provides services outside of their area without proper authorization, they face financial penalties. The first violation results in a $1,000 fine, the second in a $2,500 fine, and the third and subsequent violations each incur a $5,000 fine. Additionally, the franchisee must provide restitution of profits derived from the improperly performed services to the agency that rightfully services that area.
The FDD states that franchisees must only provide the temporary services and placement services detailed in the Confidential Operations Manual. This suggests that offering unauthorized services, even with a discount, would violate the franchise agreement. The agreement emphasizes uniformity and quality of services across all All Team agencies, particularly for National/Regional Accounts. Violating these requirements can lead to damages of $1,000 for the first violation, $2,500 for the second, and $5,000 for the third, potentially resulting in the franchisee losing the ability to service National/Regional Accounts.
Therefore, offering discounts on unauthorized services to attract customers would likely be a breach of the All Team franchise agreement. Franchisees are expected to adhere to the standards and procedures of All Team and the System, and all business dealings must be governed by the highest standards of honesty, integrity, fair dealing, and ethical conduct. Franchisees must also comply with all federal, state, municipal, and local laws, rules, regulations, ordinances, and codes applicable to the agency. A franchisee offering unauthorized services could face fines, restitution, and potential damage to All Team's reputation.