What is the purpose of withholding customer payments by All Team after termination?
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, after the termination or expiration of the Funding Agreement, All Team will withhold up to $10,000 in customer payments. This is to allow All Team to conduct a post-termination audit to confirm the accuracy of receivables and compliance with client requirements.
The funds are held as a reserve for unpaid receivables or customer chargebacks. All Team can withhold these payments pending the result of the audit, or for up to 12 months after termination.
This means that if a franchisee's agreement with All Team ends for any reason other than the franchisee exercising their termination right, All Team has the right to hold back a portion of customer payments to ensure all financial matters are settled correctly. This protects All Team from potential losses due to unpaid invoices or customer disputes that arise after the franchise agreement has ended. The franchisee should be aware of this policy and factor it into their financial planning when considering the All Team franchise opportunity.