Is an individual whose compensation is paid by an All Team franchisee considered an employee of ATFC?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
ependent Contractor.** Nothing in this Processing Agreement shall be construed to constitute either party as the employee, representative or, except to the extent expressly provided herein, the agent of the other, or to constitute ATFC and USER as partners or joint venturers. USER shall not have the power and shall not represent or imply that it has the power, to obligate ATFC for any liabilities or expenses, except as otherwise expressly agreed to in writing by ATFC. Neither USER nor any individual whose compensation for services is paid by USER in any way, directly or indirectly, expressly or by implication, shall be construed to be an employee of ATFC for any purpose, including, without limitation any tax or withholding requirements levied or fixed by any governmental law, rule or regulation is solely responsible for the day-to-day operations of the Business.
- D. Indemnification. Under no circumstances shall ATFC be liable for any act, omission, debt, or other obligation of USER. USER will indemnify, defend and save harmless ATFC and its employees, agents, officers, directors, parents, subsidiaries, affiliates, successors and assigns ("Indemnitees") from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, costs and expenses (including without limitation legal fees and expenses) of any kind and nature whatsoever, including without limitation damages or injuries suffered by Indemnitees, which may be imposed on, incurred by or asserted against the Indemnitees in any way arising out of the acts or omissions of USER or its employees, agents, officers, directors, parents, subsidiaries, affiliates, successors and assigns ("Indemnitors") pursuant to or relating to this Agreement or the transactions or relationships contemplated hereby or a breach or default by USER under this Agreement regardless of whether the Indemnities were negligent or that said negligence was a contributing factor in the liability.
- E. Assignment. This Processing Agreement is personal to USER and shall not be assignable or transferable by USER, in whole or in part, either voluntarily or by operation of law, except with the prior written consent of ATFC, which consent shall not unreasonably be withheld. For all purposes of this Processing Agreement, the transfer of the majority of the equity of USER to persons other than the present owners thereof, or of any substantial portion of the Business in one or more transactions, shall be deemed an assignment of this Processing Agreement requiring such consent.
Source: Item 23 — RECEIPT (FDD pages 34–161)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, neither the franchisee (referred to as USER) nor any individual whose compensation is paid by the franchisee is considered an employee of All Team. This distinction applies to all purposes, including tax and withholding requirements under any governmental law, rule, or regulation. The franchisee is solely responsible for the day-to-day operations of the business. This is further reinforced by stating that nothing in the Funding Agreement should be construed to constitute either party as the employee, representative, or agent of the other, except as expressly provided.
This aspect of the franchise agreement is crucial for prospective franchisees. It clarifies that franchisees are independent contractors and are responsible for managing their own employees. All Team is not liable for any act, omission, debt, or other obligation of the franchisee. This independence also means that the franchisee is responsible for compliance with employment laws, including worker's compensation insurance.
All Team requires franchisees to carry worker's compensation insurance for all employees and comply with all related laws and regulations. Franchisees must provide proof of such insurance and payment to All Team as requested. The franchisee is also responsible for making all required reports and paying all worker's compensation insurance premiums for their temporary employees. This arrangement is typical in franchising, where franchisees operate as independent business owners and are responsible for their own employees and business operations.