What happens after 90 days regarding Accounts Receivable for an All Team franchise?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
| TYPE OF FEE | AMOUNT | DUE DATE | REMARKS |
|---|---|---|---|
| Funding Fee (Note 3) | 1.5% of Customer Invoice amount (one-time fee); After 30 days, Accounts Receivable Service Charge of 0.05% per day will be assessed thereafter; and Upon 90 days the amount of the Accounts Receivable is charged back to you | By noon Wednesday based on the prior week's Temporary Employment Gross Billings | This Funding Fee is deducted from the Temporary Gross Billings collected by us under the Funding Agreement. The Funding Fee can be increased upon written notice. |
Source: Item 6 — OTHER FEES\ (FDD pages 10–13)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, after 90 days, the amount of the Accounts Receivable is charged back to the franchisee. This policy is part of the Funding Fee agreement, where All Team purchases the franchisee's customer invoices, which then become All Team's Accounts Receivables.
Prior to the 90-day mark, specifically after 30 days, an Accounts Receivable Service Charge of 0.05% per day is assessed. This means that franchisees will incur a daily charge on outstanding invoices between 30 and 90 days. The initial Funding Fee is 1.5% of the Customer Invoice amount, which is a one-time fee deducted from the Temporary Gross Billings collected by All Team under the Funding Agreement.
This chargeback policy after 90 days means that All Team franchisees bear the risk of uncollected invoices beyond this period. Franchisees need to manage their customer relationships and ensure timely payments to avoid these chargebacks. This arrangement is somewhat unique, as in some franchise systems, the franchisor assumes more of the credit risk. The Funding Fee itself can be increased by All Team with written notice, adding another layer of potential cost for the franchisee.
Prospective All Team franchisees should carefully review the Funding Agreement (Exhibit C) to fully understand the terms and conditions related to Accounts Receivables, including the circumstances under which chargebacks may occur and any recourse available to dispute them. Understanding the creditworthiness of their clients and proactively managing collections will be crucial for maintaining healthy cash flow and profitability.