What happens to the All Team franchisee's rights upon termination or expiration of the franchise agreement?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
d within thirty (30) days after 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 to confirm the accuracy of financial reporting, receivables, and compliance with client requirements. In addition, ATFC will 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.
Upon ATFC's request, FRANCHISEE shall assign to ATFC any interest that FRANCHISEE may have in any lease or sublease for the Agency. ATFC may exercise the option at or within thirty (30) days after either termination or expiration of this Agreement or within thirty (30) days of notice by FRANCHISEE's landlord of its intent to terminate the lease or sublease. In such event ATFC, in its sole discretion, shall have the right and is hereby empowered to take possession of the premises demised by the lease or sublease, expel FRANCHISEE therefrom, and, in such event, FRANCHISEE shall have no further right, title or interest in the lease or sublease. In the event that ATFC does not elect to exercise its option to acquire the lease or sublease for the premises, FRANCHISEE shall make such modifications or alterations to the premises of the Agency operated hereunder immediately upon termination or expiration as may be necessary to distinguish the appearance of such premises from that of other All Team agencies under the System and shall make such specific additional changes thereto as ATFC may reasonably request for that purpose. In the event FRANCHISEE fails or refuses to comply with the requirements of this paragraph, ATFC shall have the right to enter upon the premises without being guilty of trespass or any other tort for the purposes of making or causing to be made such changes as may be required as the expense of FRANCHISEE which expense FRANCHISEE agrees to pay upon demand.
FRANCHISEE irrevocably appoints ATFC or ATFC's nominee to be FRANCHISEE's attorneyin-fact coupled with an interest, and with power of substitution, to execute and to file for FRANCHISEE any relevant document to accomplish the acts contemplated in this Section XII.C. ATFC has the right to file an original counterpart or a copy of this Agreement with the telephone company, landlord or any court, agency or person as written evidence of the appointment by FRANCHISEE of ATFC or ATFC's nominee to be FRANCHISEE's attorney-in-fact. The expiration or termination of this Agreement shall not relieve FRANCHISEE of any of FRANCHISEE's obligations to ATFC existing at the time of such expiration or termination, or terminate FRANCHISEE's obligations that, by their nature, survive the expiration or termination of this Agreement, including but not limited to the provisions regarding trade secrets, non-competition, non-solicitation and indemnification. Furthermore, the expiration or termination of this Agreement shall be without prejudice to ATFC's rights against FRANCHISEE; and in the event of a termination which is the result of FRANCHISEE's material breach or default under this Agreement, ATFC shall, in addition to its rights set forth above, also be entitled to all rights and remedies available at law or in equity.
- D. ATFC's Right to Purchase Personal Property. After the termination or expiration of this Agreement, but not upon an approved Transfer, ATFC shall have the right, but not the obligation, to purchase all of FRANCHISEE's equipment, inventory, supplies and other personal property used in connection with the operation of the business. Notwithstanding the foregoing, FRANCHISEE has the right to keep any and all personal effects and furnishings of sentimental value to FRANCHISEE, which FRANCHISEE elects to exclude. The purchase price shall be at fair market value (less the amount of any liens on the property), which shall be established (if the parties are unable to agree) by the average of two independent appraisals. FRANCHISEE and ATFC shall each select an independent appraiser within thirty (30) days after termination or expiration of this Agreement.
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, all of the franchisee's rights are terminated. The franchisee must immediately stop using All Team's marks, signs, colors, structures, printed goods, and advertising materials. They must also return any copyrighted materials provided by All Team. If requested, the franchisee must assign their telephone numbers, clients, candidates, customers, and employee roster to All Team and execute any necessary documents to do so. The franchisee will immediately cease providing services to all customers and candidates and forfeit any rights to those customers, candidates, and customer accounts. All Team can request the franchisee to assign customer contracts and candidates to them, and All Team can service these accounts or assign them to others. The franchisee must also pay all amounts due to All Team, its affiliates, and suppliers. The franchisee must return all materials containing confidential information, including the Confidential Operating Manual. The franchisee must cancel any assumed name registrations containing All Team's marks and provide evidence of compliance within 5 days of termination or expiration. All Team can conduct a post-termination audit to confirm financial reporting accuracy, receivables, and compliance with client requirements. All Team can withhold up to $10,000 in customer payments pending the audit results or for up to 12 months after termination as a reserve for unpaid receivables and customer chargebacks.
Additionally, All Team can request the franchisee to assign any interest in the lease or sublease for the agency. All Team can exercise this option within 30 days of termination or expiration or within 30 days of the landlord's notice to terminate the lease. If All Team exercises this option, they can take possession of the premises and expel the franchisee, who will then have no further rights to the lease. If All Team does not acquire the lease, the franchisee must modify the premises to distinguish it from other All Team agencies, making any changes All Team reasonably requests. If the franchisee fails to comply, All Team can enter the premises and make the changes at the franchisee's expense, which the franchisee must pay upon demand.
Furthermore, the expiration or termination of the agreement does not relieve the franchisee of any obligations to All Team existing at the time of termination, including obligations related to trade secrets, non-competition, non-solicitation, and indemnification. Termination does not prejudice All Team's rights against the franchisee. If the termination results from the franchisee's material breach or default, All Team is entitled to all rights and remedies available at law or in equity. After termination or expiration, All Team has the right, but not the obligation, to purchase the franchisee's equipment, inventory, supplies, and other personal property used in the business, excluding personal effects and furnishings of sentimental value. The purchase price will be the fair market value, less any liens, determined by the average of two independent appraisals if the parties cannot agree. All Team has 30 days after the fair market value is determined to exercise this right and an additional 30 days to pay for the property.