What right does All Team have regarding customer payments upon termination of the Funding Agreement?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
bsequent violation.
Note 3- Funding Fee. You are required to obtain payroll funding from us. Currently we are the only approved payroll funding source for our franchisees. Attached as Exhibit C is a copy of the Funding Agreement you must sign in order to obtain payroll funding from us. Under the Funding Agreement, we purchase your customer invoices ("Customer Invoice(s)") which then become our "Accounts Receivables". The Funding Fee is subject to change upon written notification to you, however we will not change it more often than once a year. Upon the termination of the Funding Agreement, we also have the right to withhold up to $10,000 in customer payments for a period of 12 months that we can use to offset any unpaid receivables or c
Source: Item 6 — OTHER FEES\ (FDD pages 10–13)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, All Team franchisees are required to obtain payroll funding from All Team, who is currently the only approved payroll funding source. As part of the Funding Agreement, All Team purchases the franchisee's customer invoices, which then become All Team's accounts receivables. Upon termination of the Funding Agreement, All Team has the right to withhold up to $10,000 in customer payments for a period of 12 months.
This provision in the Funding Agreement allows All Team to offset any unpaid receivables or customer chargebacks that may arise after the agreement is terminated. This means that if a franchisee owes All Team money for unpaid invoices or if customers dispute charges, All Team can use the withheld customer payments to cover those costs. The franchisee will not have access to these funds during this 12-month period.
For a prospective All Team franchisee, this is an important consideration. It means that upon termination of the Funding Agreement, up to $10,000 of their customer payments could be held by All Team for up to a year. Franchisees should factor this potential hold on funds into their financial planning, especially when considering the implications of terminating the Funding Agreement. It is also important to understand the terms and conditions under which All Team can offset unpaid receivables or customer chargebacks to avoid potential disputes.