What is the maximum aggregate liability of All Team related to claims arising from the Funding Agreement?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
- Q. Maximum Liability. ATFC MAXIMUM AGGREGATE LIABILITY AND THE MAXIMUM AGGREGATE LIABILITY OF ANY OF ATFC'S OFFICERS, OWNERS, DIRECTORS, MEMBERS, MANAGERS, EMPLOYEES, AFFILIATES, PARENTS OR SUBSIDIARIES RELATED TO ANY AND ALL CLAIMS RELATING TO OR ARISING FROM THIS AGREEMENT OR THE RELATIONSHIP SET FORTH IN THIS AGREEMENT SHALL BE COLLECTIVELY LIMITED TO THE AMOUNT USER PAID TO ATFC WITHIN THE PRIOR 12 MONTHS IMMEDIATELY BEFORE WRITTEN NOTICE OF ANY PROPER CLAIM IS RECEIVED BY ATFC.
Source: Item 23 — RECEIPT (FDD pages 34–161)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, the maximum aggregate liability for All Team and its related parties (officers, owners, directors, etc.) regarding claims related to the Funding Agreement is limited to the amount the franchisee (USER) paid to All Team within the 12 months immediately before All Team receives written notice of a proper claim.
This means that if a franchisee has a dispute with All Team under the Funding Agreement, the most they can collectively recover from All Team and its affiliates is the amount they've paid to All Team in the year leading up to the claim. This limitation could significantly impact a franchisee's ability to recover damages if they believe All Team has breached the agreement or caused them financial harm exceeding that amount.
For a prospective All Team franchisee, this clause represents a significant risk. It caps All Team's potential liability, regardless of the actual damages the franchisee may suffer. Before signing the Funding Agreement, franchisees should carefully consider this limitation and potentially seek legal advice to understand the full implications. They may also want to inquire about All Team's history of claims and disputes to assess the likelihood of encountering such a situation.
This type of liability limitation is not uncommon in franchise agreements, but the specific terms can vary. Some agreements may have higher caps or different methods for calculating the maximum liability. Franchisees should compare this provision to those in other franchise agreements to understand how it stacks up against industry norms.