How does termination of the All Team agreement affect prior transactions?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
FRANCHISEE IS NOT A FRANCHISEE OF ATFC AND MAY NOT RELY UPON BECOMING A FRANCHISEE OF ATFC.**
IN WITNESS WHEREOF, the parties have executed this Agreement on the date set forth below their names.
ALL TEAM FRANCHISE CORPORATION Brian Hindman, Chief Executive Officer , Address of FRANCHISEE:# GUARANTY AND ASSUMPTION OF OBLIGATIONS
In consideration of, and as an inducement to, the execution of the above Franchise Agreement (the "Agreement"), by ALL TEAM FRANCHISE CORPORATION ("ATFC") in favor of _______________________ ("FRANCHISEE"), each of the undersigned ("GUARANTORS") hereby personally and unconditionally guarantees to ATFC, its Affiliates (as hereinafter defined), and their successors and assigns for the term of the Agreement and thereafter as provided in the Agreement, that FRANCHISEE shall punctually pay and perform each and every undertaking, agreement and covenant set forth in the Agreement and agrees to be personally bound by, and personally liable for the breach of each and every provision in the Agreement, including but not limited to, the restrictive covenants and nondisclosure provisions contained in the Agreement, as well as the provisions in the Agreement relating to the Marks and Transfers to the same extent as and for the same period of time as FRANCHISEE is required to comply with and abide by such covenants and provisions. All of the foregoing obligations of the undersigned shall survive any expiration or termination of the Franchise Agreement or this Guaranty and Assumption of Obligations. The GUARANTORS further hereby personally and unconditionally guarantee all debts and obligations FRANCHISEE incurs to ATFC, its successors, assigns, affiliated entities, parent corporation, and subsidiaries ("Affiliates"), as the case may be, as a result of any obligations under the Agreement and as a result of purchases of products or services from ATFC and its Affiliates. Each of the undersigned waives:
- (1) acceptance and notice of acceptance by ATFC or Affiliates of the foregoing undertakings;
- (2) notice of demand for payment of any indebtedness or nonperformance of any obligations hereby guaranteed;
- (3) protest and notice of default to any party with respect to the indebtedness or nonperformance of any obligations hereby guaranteed;
- (4) any right he or she may have to require that an action be brought against FRANCHISEE or any other person as a condition of liability;
- (5) all rights to payments and claims for reimbursement or subrogation which any of the GUARANTORS may have against the FRANCHISEE arising as a result of the GUARANTORS' execution of and performance under this guaranty; and
- (6) any and all other notices and legal or equitable defenses to which he or she may be entitled.
Each of the undersigned consents and agrees that:
- (1) his or her direct and immediate liability under this guaranty shall be joint and several;
- (2) he or she shall render any payment or performance required under the Agreement upon demand if the FRANCHISEE fails or refuses punctually to do so;
- (3) such liability shall not be contingent upon or conditioned upon pursuit by ATFC or Affiliates of any remedies against the FRANCHISEE or any other person; and
- (4) such liability shall not be diminished, relieved or otherwise affected by any extension of time, credit or the indulgence which ATFC or Affiliates may from time to time grant to the FRANCHISEE or to any other person, including, without limitation, the acceptance of any partial payment or performance or the compromise or release of any claims, none of which shall in any way modify or amend this guaranty, which shall be continuing and irrevocable during the term of the Agreement.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, the Guaranty and Assumption of Obligations agreement ensures that the guarantors remain responsible for the franchisee's debts and obligations to All Team and its affiliates, even after the termination or expiration of the Franchise Agreement. This includes all debts and obligations resulting from the Franchise Agreement and purchases of products or services from All Team and its Affiliates. This obligation survives any expiration or termination of the Franchise Agreement or the Guaranty and Assumption of Obligations.
Additionally, for a period of two years post-termination, expiration, or transfer of the agreement, the franchisee is restricted from engaging in any similar business within the area of the agency or any other All Team agency, unless they obtain prior written consent from All Team. This restriction extends to performing services for, being employed by, or having a financial interest in any competing business. The franchisee is also prohibited from soliciting or diverting customers or employees of All Team or its affiliates to any similar business during this period.
Furthermore, the Security Agreement outlines that it will terminate when any credit commitment from the Secured Party (All Team) to the Debtor (franchisee) expires or is terminated, and all liabilities have been fully paid. However, an affidavit or written statement from All Team asserting that any portion of the liabilities remains unpaid serves as conclusive evidence of the continuing effectiveness of the agreement. Upon termination of the agreement and the franchisee's request, All Team will terminate all effective financing statements related to the collateral.
These clauses protect All Team's interests by ensuring continued financial responsibility and preventing unfair competition from former franchisees. Prospective franchisees should carefully consider these post-termination obligations and restrictions, as they could significantly impact their future business activities.