Is All Team required to terminate the franchise agreement if good cause exists?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
structure of ATFC, the resulting entity shall step into the place of ATFC, without any additional consent of or notice to the FRANCHISEE, as if the term ATFC were defined in this Agreement to include such entity.
XII. DEFAULT AND TERMINATION
A. Termination By ATFC.
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- 30 Day Opportunity to Cure. ATFC may at its option, and without prejudice to any other rights or remedies provided for in this Agreement or at law or in equity, terminate this Agreement for "good cause". Without limitation as to other situations, good cause for termination also exists if FRANCHISEE or any guarantor of this Agreement:
- (1) Does not substantially perform any and all of the lawful terms, conditions, and obligations of this Agreement, or the mandatory requirements under the Confidential Operations Manual; or
- (2) Loses possession of the premises at which the Agency is located and fails to secure a suitable site for relocation which ATFC consents to within three (3) months thereafter; or defaults under the terms of its lease for the premises; or
- (3) Misrepresents any of the billings upon which the Fees are calculated that FRANCHISEE is required to report to ATFC; or
- (4) Loses any permit or license which is a prerequisite to the operation of the Agency for a period of five (5) days; or
- (5) Misuses any of the Marks or confidential information, or engages in conduct which reflects unfavorably, in ATFC's opinion upon the operation, maintenance, goodwill and/or reputation of the franchise Systems; or
- (6) Is adjudged bankrupt, becomes insolvent, or makes a general assignment for the benefit of creditors (subject to Section XII.A.3.(d) below); or
- (7) Commits any other act which constitutes good cause under applicable state law or court decisions; or
- (8) Fails to provide ATFC with the timely reports of sales and other statistical and business information as required under this Agreement; or
- (9) Engages in any illegal, fraudulent, unfair or deceptive business practice, which, in ATFC's opinion, adversely affects the operation, maintenance, or goodwill of the franchise; or
- (10) Fails to keep the Agency open for a period of seven (7) consecutive days without justifiable cause; or
- (11) Fails to pay its lawful debts and any and all taxes when same become due; or
- (12) Fails to properly service customers in accordance with ATFC's standards and within the spirit and intent of this Agreement. (By way of illustration and not limitation, a failure to properly service customers, will occur if at least three unresolved customer complaints are made regarding the services rendered by the Agency within any consecutive ninety (90) day period because of dissatisfaction with services provided by the Agency.);
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, All Team has the option to terminate the franchise agreement if there is good cause. All Team is not required to terminate the agreement. Specifically, All Team may choose to terminate the agreement at its option, without prejudice to any other rights or remedies. Good cause for termination exists if the franchisee fails to perform the terms of the agreement, loses possession of the premises, misrepresents billings, loses necessary permits or licenses, misuses marks or confidential information, becomes bankrupt or insolvent, commits acts that constitute good cause under state law, fails to provide timely reports, engages in illegal business practices, fails to keep the agency open, or fails to pay debts and taxes.
However, if the termination is based on a failure to comply with the agreement, All Team must provide the franchisee with written notice of default and, if permitted by applicable law, only ten days to remedy the default. In certain situations, All Team can terminate the franchise immediately and without notice if permitted by state law. These situations include conviction of a felony, fraudulent activity, abandonment of the franchise, bankruptcy or insolvency of the franchisee, termination of another agreement between the franchisee and All Team, repeated failure to comply with the agreement, or any other act that permits termination without notice under applicable state law.
In contrast, the franchisee may terminate the agreement if All Team materially defaults in the performance of any terms and conditions in the agreement. The franchisee must provide All Team with written notice within thirty days of the default, and All Team has thirty days to correct the default. If the default cannot be cured within thirty days, All Team has a longer period of time to cure the default, provided that All Team has commenced curing the default within the initial thirty-day period and diligently pursues a cure.