What happens to Customer Invoices that are unpaid after 90 days for All Team franchisees?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
B. Delinquent Account*.* The balance of any Accounts Receivable remaining unpaid in whole or in part for more than ninety days (90) days from the Customer Invoice date and the balance of any Accounts Receivable owing by any Customer who is bankrupt or insolvent or who voluntarily seeks protection under the federal bankruptcy laws or against whom involuntary relief in bankruptcy is sought, or who has filed an assignment for the benefit of creditors prior to the expiration of such ninety days (90) day period, or as to whom ATFC has a reasonable basis for believing that such Customer is about to become subject to one of the foregoing conditions or events shall be deemed a "Delinquent Account." The full amount of each Delinquent Account shall be deducted from the Purchase Price or, at ATFC's election, be paid by USER to ATFC upon demand.
Payment received by ATFC in the form of a check shall be deemed to have been received by ATFC when the funds represented thereby have been collected.
Notwithstanding the payment to or deduction by ATFC of any Delinquent Account or any termination of this Funding Agreement, so long as any amounts owing to ATFC under this Funding Agreement remain unpaid, any payments on Delinquent Accounts shall continue to be collected by ATFC as collection agent for USER.
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 invoice remains unpaid for more than 90 days from the invoice date, it is considered a "Delinquent Account." The full amount of this delinquent account will be deducted from the franchisee's Purchase Price. Alternatively, All Team can elect to have the franchisee pay the amount to All Team upon demand.
Even after the amount of the Delinquent Account is paid to or deducted by All Team, All Team will continue to act as the collection agent for the franchisee as long as any amounts are still owed to All Team under the Funding Agreement. This means that any payments received on these delinquent accounts will still be collected by All Team.
This policy has significant implications for All Team franchisees. It means that franchisees bear the risk of customer non-payment beyond 90 days. Franchisees need to carefully manage customer credit and payment terms to minimize the risk of invoices becoming delinquent and being charged back to them. The continued collection efforts by All Team, even after the chargeback, offer some potential for recovering the debt, but the franchisee's immediate financial burden remains.