Does the paragraph regarding late payment interest constitute an agreement by All Team Franchise Corporation (ATFC) to accept payments after they are due?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
On all amounts which User owes to ATFC that are not paid when due, ATFC shall have the right to charge interest on late payments equal to the lesser of one and one-half percent (1-1/2%) per month or the maximum legal rate in the jurisdiction where the Agency is located. User acknowledges that this paragraph does not constitute ATFC's agreement to accept payments after same are due or a commitment by ATFC to extend credit to, or otherwise finance User's operation of the Agency. Further, User acknowledges that User's failure to pay all amounts when due constitutes grounds for termination of this Agreement.
Source: Item 23 — RECEIPT (FDD pages 34–161)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, the paragraph addressing interest on late payments does not constitute an agreement by All Team Franchise Corporation (ATFC) to accept payments after they are due. The FDD clearly states that while ATFC has the right to charge interest on late payments, this does not imply an obligation to accept these payments past their due date. The interest charged will be the lesser of one and one-half percent (1-1/2%) per month or the maximum legal rate in the jurisdiction where the All Team agency is located.
This distinction is important for prospective All Team franchisees because it clarifies that late payments, even with interest, are not an acceptable practice and do not grant the franchisee an extension of credit. All Team is simply reserving its right to charge interest on overdue amounts, a fairly standard business practice.
Furthermore, the FDD explicitly states that failure to pay all amounts when due constitutes grounds for termination of the Franchise Agreement. This underscores the importance of timely payments and the potential consequences of not meeting financial obligations to All Team. Franchisees should be aware that while late payment interest may be charged, consistent late payments can lead to serious repercussions, including the termination of their franchise agreement.