What happens to the All Team Franchisee's Interest in the Agreement and in the Agency to the FRANCHISEE's heirs, personal representatives or conservators?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
The Transfer of the FRANCHISEE's Interest in this Agreement and in the Agency to the FRANCHISEE's heirs, personal representatives or conservators, as applicable, in the event of death or legal incapacity of the FRANCHISEE, shall not give rise to ATFC's right of first refusal as set forth in Section XVI.E below, provided that the heirs, personal representatives or conservators, as applicable, meet ATFC's standards for new franchisees; execute the then-current form of Franchise Agreement; and, that a manager has, or within thirty days, shall have satisfactorily completed ATFC's Initial Training Program.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, in the event of the death or legal incapacity of a franchisee, the transfer of the franchisee's interest in the Franchise Agreement and the agency to their heirs, personal representatives, or conservators does not trigger All Team's right of first refusal. However, this is conditional. The heirs, personal representatives, or conservators must meet All Team's standards for new franchisees. They are also required to execute the then-current form of the Franchise Agreement. Additionally, a manager must have already completed All Team's Initial Training Program or must satisfactorily complete it within thirty days of the transfer.
This clause provides a mechanism for the continuation of the All Team franchise in the event of unforeseen circumstances affecting the franchisee. It ensures that the business can pass to the franchisee's intended beneficiaries, maintaining the franchise's operational continuity. However, All Team retains control over who ultimately operates the franchise by setting standards for the new operators and requiring adherence to the current franchise agreement and training protocols.
For a prospective All Team franchisee, this means that they can designate an heir to continue the business. This provides some assurance that their investment can be passed on. However, the designated heir will need to meet All Team's standards and complete the required training. This could involve a significant time commitment and potential costs for the heir. The requirement to execute the then-current form of the Franchise Agreement also means that the terms of the franchise could change, potentially impacting the profitability or operational requirements of the business.
It is important for prospective franchisees to carefully consider these conditions and discuss them with All Team to fully understand the implications for their estate planning and the future of their franchise. Franchisees should also inquire about the specific standards that heirs, personal representatives, or conservators must meet to ensure a smooth transition in the event of death or incapacity.