For All Team, what happens if any portion of the Liabilities remains unpaid?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
ptable to Secured Party. Any notice of sale, disposition, or other intended action by Secured Party that is given to Debtor at the address listed in this Agreement (or, if no address is listed for Debtor, at its principal place of business) at least 10 Business Days before the action is taken will constitute reasonable notice of disposition to Debtor. Secured Party may apply any proceeds from a disposition of any of the Collateral toward payment of such of the Liabilities and in such order of application as Secured Party elects in its sole discretion, and Debtor is liable to Secured Party for any deficiency between the proceeds realized upon any disposition of the Collateral and the amount of Liabilities remaining unpaid. Secured Party may exercise its right to collect the Liabilities and to enforce any other security, before or after taking any action under the Liabilities.
- 7. Termination. This Agreement will terminate when (a) any commitment or offer of Secured Party to extend credit to Debtor expires (without renewal by Secured Party) or is terminated by Secured Party and (b) all the Liabilities have been fully paid. An affidavit or written statement of Secured Party or any agent, officer, or attorney for Secured Party showing or asserting that either any portion of the Liabilities remains unpaid constitutes conclusive evidence of the continuing effectiveness of this Agreement and any interested person is authorized to rely on it. Upon termination of this Agreement and the request of Debtor, Secured Party shall terminate all effective financing statements in its favor that are then on file with respect to the Collateral.
- **8.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, if any portion of the liabilities remains unpaid, the Debtor (franchisee) is liable to the Secured Party (ATFC) for any deficiency between the proceeds realized upon any disposition of the collateral and the amount of liabilities remaining unpaid. An affidavit or written statement of the Secured Party asserting that any portion of the liabilities remains unpaid constitutes conclusive evidence of the continuing effectiveness of the agreement. This means All Team can take legal action to recover the unpaid amounts.
All Team has the right to collect the liabilities and enforce any other security before or after taking any action under the liabilities. This indicates that All Team has several avenues for recovering outstanding debts, including pursuing legal action, utilizing collateral, or enforcing other security measures. The agreement remains effective as long as any portion of the liabilities remains unpaid, giving All Team a sustained ability to pursue these remedies.
Furthermore, upon the occurrence of a default, All Team may declare all liabilities immediately due and payable without further notice to the franchisee. The franchisee is also required to assemble the collateral and make it available to All Team at a convenient place. This highlights the immediate and decisive actions All Team can take in the event of a default, ensuring they have the means to recover any outstanding liabilities.
In addition, All Team 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. This clause allows All Team to retain a portion of customer payments to cover potential unpaid receivables or chargebacks, providing an additional layer of financial protection for the company.