What interest rate will All Team charge on under-reported gross billings?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
If it is found that FRANCHISEE under-reported Temporary Employment Gross Billings and/or Permanent Placement Gross Billings, FRANCHISEE will reimburse ATFC for the amount of the Fees charges that would have been billed had billings been reported accurately, plus interest on those amounts at the rate of the lesser of one and one-half percent (1½%) per month or the maximum legal rate in the jurisdiction where the Agency is located. In addition, in the event that an audit by ATFC results in a determination that any or all of the Fees paid to ATFC are deficient (underpaid) by more than one percent (1%), the FRANCHISEE shall promptly pay to ATFC any amounts shown to be due and all costs and expenses incurred by ATFC in conducting the subsequent audit to determine that the FRANCHISEE is reporting correctly (not the audit which disclosed the original deficiency), including salaries of the ATFC's representatives, travel costs, room and board and audit fees. Nothing contained herein shall constitute an agreement by ATFC to accept any payments after the same are due or commitment by ATFC to extend credit to or otherwise finance the FRANCHISEE's operation of the Agency. The obligations of this provision survive termination or expiration of the Agreement.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, if a franchisee is found to have under-reported their Temporary Employment Gross Billings or Permanent Placement Gross Billings, All Team will charge interest on the underpaid fees. The interest rate will be the lesser of one and one-half percent (1½%) per month or the maximum legal rate in the jurisdiction where the All Team agency is located.
In addition to the interest on under-reported gross billings, if an audit determines that the fees paid to All Team are deficient by more than one percent (1%), the franchisee must promptly pay the deficient amounts. The franchisee is also responsible for covering all costs and expenses All Team incurs while conducting a subsequent audit to verify correct reporting. These costs include salaries of All Team's representatives, travel costs, room and board, and audit fees.
This policy incentivizes accurate and transparent reporting of gross billings by All Team franchisees. Franchisees should ensure they have robust accounting practices to avoid under-reporting and the associated penalties. The potential for interest charges and audit-related expenses could significantly impact a franchisee's profitability if discrepancies arise.