For All Team franchisees, what is the consequence of breaching any warranties or representations in the Funding Agreement regarding purchased Accounts Receivable?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
USER acknowledges and agrees that ATFC is relying on the representations, warranties and covenants contained in this Section and in the Security Agreement, and any misrepresentation or breach or failure of any thereof shall entitle ATFC to immediately terminate this Funding Agreement.
- **IX.
Warranties and Representations**.
USER warrants and represents that (a)USER is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation and
Source: Item 23 — RECEIPT (FDD pages 34–161)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, if a franchisee breaches any warranties or representations in the Funding Agreement regarding purchased Accounts Receivable, All Team Franchise Corporation (ATFC) is entitled to immediately terminate the Funding Agreement.
Specifically, the franchisee (referred to as USER in the document) warrants and represents that each purchased Account Receivable is genuine, valid, and represents a completed delivery or performance. It must be enforceable for the full amount, subject to no dispute, and free of security interests except those granted to ATFC. Additionally, the Account Receivable must be payable in United States Dollars and properly invoiced with notice of the sale and assignment to ATFC.
ATFC emphasizes its reliance on these warranties and representations. Therefore, any misrepresentation, breach, or failure related to these warranties gives ATFC the right to terminate the Funding Agreement immediately. This could have significant financial implications for the franchisee, as it could disrupt their cash flow and business operations.