What is the maximum amount All Team can withhold in customer payments pending the result of the audit?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
ign to USER any security interest or other interest which ATFC may have in USER's collateral. Notwithstanding any termination of this Funding Agreement, until such time as full payment is made by USER to ATFC of all sums due to ATFC under this Funding Agreement, USER shall continue to perform all of its obligations pursuant to the terms of this Funding Agreement with regard to such Accounts Receivable. No termination of this Funding Agreement, under any circumstances, shall release or discharge USER from its continuing obligations hereunder.
Source: Item 23 — RECEIPT (FDD pages 34–161)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, in the event of termination or expiration of the Funding Agreement (excluding termination by the USER), All Team Franchise Corporation (ATFC) reserves the right to conduct a post-termination audit. During this audit period, ATFC can withhold up to $10,000 in customer payments.
This withholding serves as a reserve for any unpaid receivables or customer chargebacks that may arise. The withholding period can last up to 12 months after the termination of the Funding Agreement, providing ATFC with a window to reconcile accounts and address potential financial discrepancies.
For a prospective All Team franchisee, this means that upon termination of the Funding Agreement, a significant portion of customer payments could be held back for up to a year. Franchisees should factor this potential delay in receiving funds into their financial planning and be prepared for a possible impact on cash flow during this period. It is important to maintain accurate records and comply with client requirements to minimize the risk of discrepancies that could prolong the audit and withholding period.