What is the All Team franchisee required to do immediately upon learning of customer disputes?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
USER agrees to notify ATFC immediately of all returns and allowances and of all disputes made by Customers and to adjust all Disputes at its own expense, issuing credit memoranda promptly.
ATFC's practice is to allow a reasonable time for the settlement of Disputes between USER and USER's Customers without waiving ATFC's right at any time to adjust any Disputes on Accounts Receivable directly with the Customer and to charge back to USER at any time the full uncollected amount of the purchased Account Receivable involved.
ATFC may at any time charge or offset against any funds due to USER which are held or received by ATFC the full uncollected amount of: (a) any Customer deduction or offset; (b) any Account Receivable which is not paid in full when due for any reason (real or alleged); (c) any purchased Account Receivable with respect to which USER breaches any of the warranties or representations set forth in this Agreement; (d) any anticipation deducted by a Customer on any purchased Account Receivable; and (e) payments received by ATFC on Accounts Receivable which ATFC is required at any time or for any reason to turnover or return (including, without limitation, payments made by ATFC in connection with preference claims asserted in a bankruptcy or other insolvency proceeding).
Source: Item 23 — RECEIPT (FDD pages 34–161)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, if a customer raises a dispute, the franchisee must immediately notify All Team of the dispute. The franchisee is also responsible for resolving the dispute at their own expense, which includes promptly issuing credit memoranda to the customer.
All Team retains the right to intervene and adjust disputes directly with the customer, potentially charging back the franchisee for the uncollected amount of the disputed account receivable. This means that even though the franchisee is initially responsible for handling the dispute, All Team can step in and make adjustments as they see fit, which could impact the franchisee's earnings.
All Team also has the option to charge or offset against any funds due to the franchisee the full uncollected amount of any customer deduction, offset, or unpaid account receivable. This includes situations where the franchisee breaches any warranties or representations related to the agreement, or if All Team is required to return payments due to bankruptcy or insolvency proceedings. This highlights the importance of franchisees ensuring accuracy and compliance in their dealings with customers to avoid potential financial repercussions.