Under the All Team agreement, what happens if the USER breaches or defaults on the agreement?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
p of property or the conduct of its business requires such qualification, except where the failure to be so qualified could not reasonably be expected to have a material adverse effect on USER's business or assets, and (c)USER operates its Business in material compliance with all applicable local, state and federal laws, including without limitation the Fair Labor Standards Act and all applicable tax withholding laws and regulations.
V. Termination.
- A. Default by USER. In the event of a breach of any of the terms of this Processing Agreement by USER, if the breach is not cured within ten (10) days of written notice to USER specifying the nature of such breach, ATFC may, in addition to pursuing any other remedies it may have, at its election, suspend its performance hereunder until the breach is cured or terminate this Processing Agreement. The occurrence of the same or a similar breach by USER, even if subsequently cured, twice within any twelve (12) month period shall give ATFC the right to terminate this Processing Agreement immediately upon giving written notice to USER specifying the nature of such breach, without any opportunity to cure. Upon the termination or expiration of the Franchise Agreement, for any reason, ATFC shall have the right to terminate this Processing Agreement immediately upon written notice to USER.
- B. Default by ATFC. In the event of a breach of any of the terms hereof by ATFC, which breach is not cured within ten (10) days of written notice to ATFC specifying the nature of such breach, USER may, at its election, terminate this Processing Agreement and such termination shall be effective upon the expiration of the ten (10) day cure period. Notwithstanding the foregoing, at no time during or after the term of this Agreement shall USER exercise any right of set-off, defense or counterclaim against any amounts owing to ATFC hereunder.
- C. Post-Termination Obligations. Upon the termination or expiration of this Processing Agreement for any reason, ATFC will require USER to discontinue use of the Software on ATFC's servers.
VI. Miscellaneous.
A. Compliance with Laws and Franchise Agreement. USER shall operate the Business in full compliance with all applicable governmental laws, rules and regulations and in full compliance with the Franchise Agreement. In addition, USER shall carry worker's compensation insurance for all employees and comply with all laws and regulations related thereto, and shall provide proof of such insurance, together with proof of payment for such insurance, to ATFC as requested from time to time.
B. Books and Records.
- USER shall keep at its offices, for a period of seven years after their creation, all payroll and personnel records for its temporary personnel employees and all other books of account and business records customary for the industry, which shall be available for inspection by ATFC and its representatives during normal business hours.
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- USER shall maintain such records as ATFC may reasonably request from time to time, on forms approved in writing by ATFC.
Source: Item 23 — RECEIPT (FDD pages 34–161)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, the consequences of a breach or default by the USER (franchisee) vary depending on the specific agreement in question. Under the Processing Agreement, if the USER breaches any terms, All Team may suspend its performance until the breach is resolved or terminate the agreement. However, the USER has a ten-day cure period after written notice to rectify the breach. If the USER commits the same or a similar breach twice within a twelve-month period, All Team has the right to terminate the Processing Agreement immediately without any opportunity to cure the breach. Upon termination or expiration of the Franchise Agreement, All Team can immediately terminate the Processing Agreement with written notice to the USER.
Under the Funding Agreement, a breach by the USER allows All Team to suspend its performance or terminate the agreement, provided the USER is given ten days written notice to cure the breach. If the USER breaches the dispute resolution provisions, the USER must reimburse All Team for all expenses incurred in curing the breach, including attorney's fees, and pay a Dispute Resolution Fee of $50,000. All Team states that this fee represents liquidated damages and not a penalty, acknowledging the difficulty in precisely calculating the full extent of damages from such a breach.
Furthermore, in the event of a breach or termination of the Funding Agreement by the USER, or any occurrence that would allow All Team to terminate the agreement without notice, all indebtedness of the USER to All Team becomes immediately due and payable. The guarantor(s) of the Funding Agreement are also liable to the same extent as the USER and under the same conditions. These guarantors waive any requirement for All Team to take prior action before invoking their liability. The guarantor(s) are also responsible for paying All Team's reasonable attorney's fees and expenses incurred in enforcing their obligations under the guarantee.