What happens to the customer accounts of an All Team franchisee upon termination?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
er such notice, or if such default is incapable of being cured within thirty (30) days, such longer period of time as is necessary to cure such default, provided that ATFC has commenced curing such default within said thirty (30) day period and diligently pursues a cure.
- C. Consequences of Termination. Upon termination or expiration of this Agreement, for any reason whatsoever, all of FRANCHISEE's rights hereunder shall terminate. FRANCHISEE shall immediately thereafter discontinue use of all Marks, signs, colors, structures, printed goods and forms of advertising indicative of ATFC's business and return any copyrighted materials which have been provided to FRANCHISEE by ATFC, and if ATFC requests, shall assign its telephone numbers to ATFC, clients, candidates, customers and the employee roster and execute any and all documents necessary to do so. FRANCHISEE will immediately cease providing services to all customers and candidates and forfeit any rights it may have to the customers, candidates and any customer accounts. Upon request of ATFC, FRANCHISEE will assign to ATFC any or all of FRANCHISEE'S customer contracts and candidates and ATFC will have the right to either service the accounts or assign the servicing of the accounts to others. Further, FRANCHISEE shall pay all amounts due to ATFC, ATFC's affiliates, and suppliers. Further, FRANCHISEE agrees to return any and all materials which contain Confidential Information in whatever form, including but not limited to the Confidential Operating Manual, to ATFC immediately. FRANCHISEE shall cancel any assumed name registration or equivalent registration obtained by FRANCHISEE which contains the Marks and FRANCHISEE shall furnish ATFC with evidence satisfactory to ATFC of compliance with this obligation within 5 days of the termination, expiration or Transfer. ATFC reserves the right to conduct a post termination audit
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, upon termination or expiration of the Franchise Agreement, the franchisee must immediately cease providing services to all customers and candidates, forfeiting any rights to those customers, candidates, and customer accounts. All Team has the right to request the franchisee to assign any or all customer contracts and candidates to All Team. All Team then has the right to either service these accounts directly or assign the servicing of the accounts to others.
This means that if an All Team franchise is terminated, the franchisee loses all rights to their existing customer base. All Team can take over these accounts or transfer them to another franchisee. This could significantly impact the franchisee's future income and business prospects, as they would no longer benefit from the relationships and revenue generated during the franchise term.
Additionally, All Team reserves the right to conduct a post-termination audit to confirm the accuracy of financial reporting, receivables, and compliance with client requirements. All Team can withhold up to $10,000 in customer payments pending the result of the audit, or for up to 12 months after termination, as a reserve for unpaid receivables and customer chargebacks. This further emphasizes the control All Team maintains over customer accounts and finances even after a franchise is terminated.