How does All Team receive royalties from its affiliates and franchisees?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company maintains its books and prepares its financial statements on the accrual basis of accounting wherein revenue is recognized when earned and invoiced and expenses are recognized when incurred. Furthermore, initial franchise fee income is earned upon execution of the franchise agreement, which is nonrefundable. The Company receives royalties based upon a percentage of annual sales volume of its affiliates and franchisees. Additionally, funding and processing fees are based on a percentage of gross billings.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 33)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, the company recognizes revenue when services are provided, there is persuasive evidence of an arrangement, the price is fixed, and collection is reasonably assured. All Team receives royalties based on a percentage of the annual sales volume generated by its affiliates and franchisees. In addition to royalties, All Team also collects funding and processing fees, which are calculated as a percentage of gross billings.
For a prospective All Team franchisee, this means that a portion of their revenue from temporary employment services and management placement will be paid to the franchisor as royalties. The exact percentage used to calculate these royalties is not specified in this excerpt, so franchisees should clarify this with All Team. Additionally, franchisees will need to pay a percentage of their gross billings towards funding and processing fees.
Understanding the specific percentages for both royalties and funding/processing fees is crucial for a potential franchisee to accurately forecast their expenses and profitability. These fees directly impact the franchisee's bottom line, and knowing how they are calculated is essential for making an informed investment decision. Prospective franchisees should carefully review the franchise agreement and discuss these fees with existing franchisees to fully understand their financial obligations to All Team.