Is the All Team franchisee required to use the most current franchise agreement at the time of renewal?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
The term of this Agreement shall be for a period of ten (10) years from the date of execution, unless sooner terminated in accordance with this Agreement. If FRANCHISEE is in full compliance with the terms of this Agreement, FRANCHISEE shall have the right to renew for two additional terms of ten (10) years, provided that FRANCHISEE is not in default under this Agreement at the time of renewal and agrees to execute the most current franchise agreement being utilized by ATFC. The most current franchise agreement may contain significantly different terms than this Agreement. Notwithstanding the foregoing, ATFC may, in its discretion, refuse to renew the Franchise if FRANCHISEE has been notified of defaults (even if subsequently cured) under this Agreement more than three (3) times during the initial term or more than three (3) times during any renewal term, even if FRANCHISEE is not in default at the time of such renewal. FRANCHISEE agrees to give ATFC not less than six (6) or more than eighteen (18) months written notice of an election to renew the franchise, prior to the end of the initial term or the renewal term. Failure to give such notice shall be an election not to renew the franchise. FRANCHISEE shall also pay ATFC a renewal fee of 25% of the then current Franchise Fee, remodel the Agency to current standards and execute a general release, to the extent permitted by applicable law, of any and all claims against ATFC and its affiliates and their respective shareholders, officers, directors, employees, agents, successors and assigns arising under or from this Agreement and any related agreement between the parties or under any applicable law, rule or regulation.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, a franchisee must execute the most current franchise agreement being utilized by All Team to renew their franchise agreement. The initial franchise agreement term is for ten years, with an option to renew for two additional ten-year terms. To be eligible for renewal, the franchisee must be in full compliance with the terms of the existing agreement and not in default at the time of renewal.
However, All Team has the discretion to refuse renewal if the franchisee has received default notices more than three times during the initial or any renewal term, even if those defaults were subsequently resolved and the franchisee is not in default at the time of renewal. The franchisee must provide written notice of their intent to renew the franchise not less than six months, or more than eighteen months, before the end of the current term. Failure to provide this notice constitutes an election not to renew the franchise.
In addition to executing the current franchise agreement, the franchisee must pay All Team a renewal fee equal to 25% of the then-current franchise fee. They must also remodel the agency to meet the current standards and execute a general release of claims against All Team and its affiliates, to the extent permitted by law. Because the most current franchise agreement may contain significantly different terms than the original agreement, prospective franchisees should carefully consider this requirement and understand that renewal is not guaranteed, even if they meet the basic criteria.