Does the All Team Processing Agreement specify any circumstances under which ATFC's right to indemnification is limited?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
- P. 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 Processing Agreement does specify a limitation to ATFC's maximum aggregate liability. The agreement states that the maximum aggregate liability of ATFC and its related parties for any claims related to the agreement is limited to the amount the franchisee (USER) paid to ATFC within the 12 months immediately before ATFC received written notice of a claim.
This means that even if All Team were found liable for a significant amount, their financial responsibility to the franchisee would be capped at the payments the franchisee made to All Team in the year prior to the claim. This could be a substantial limitation if the damages exceed that amount.
This clause protects All Team from potentially large payouts, but it also places a significant risk on the franchisee. It is important for a prospective franchisee to understand this limitation and consider whether additional insurance or other risk mitigation strategies are necessary to protect their business interests.