Under what circumstances will an All Team franchisee be required to pay a Dispute Resolution Fee?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
will be conducted on an individual, not a class-wide basis. None of the parties to the arbitration will be entitled to consolidation of the arbitration proceedings with the proceedings of any third party, nor will the arbitrator or any court be empowered to order a consolidation of proceedings with any third party.
D. Dispute Resolution Fee. In the event that the FRANCHISEE or its guarantors have not complied with the provisions in this Section on Dispute Resolution, FRANCHISEE shall reimburse ATFC for all of its expenses incurred in curing the FRANCHISEE's breach (including, without limitation, ATFC's attorneys' fees and costs related to dismissing and responding to any improperly filed claim) and pay the ATFC a Dispute Resolution Fee of $50,000 ("Dispute Resolution Fee"). FRANCHISEE acknowledges and agrees that the ATFC will be damaged by such breach. FRANCHISEE agrees that a precise calculation of the full extent of the damages that ATFC will incur from the breach of the Dispute Resolution provisions of this Agreement are difficult to determine and
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, a franchisee may be required to pay a Dispute Resolution Fee of $50,000 if they, or their guarantors, fail to comply with the dispute resolution provisions outlined in the franchise agreement. This fee is intended to cover All Team's expenses incurred in addressing the franchisee's breach, including attorney's fees and costs associated with dismissing or responding to improperly filed claims.
The Dispute Resolution Fee is considered liquidated damages, meaning it's a predetermined amount agreed upon by both parties to compensate All Team for damages resulting from a breach of the dispute resolution terms. All Team emphasizes that accurately calculating the full extent of damages from such a breach is difficult, hence the fixed fee to provide certainty.
This fee is not a penalty but rather a reasonable estimate of the damages All Team would incur. All Team retains the right to collect this fee in addition to any other rights they may have for non-compliance under the franchise agreement. This means that in addition to the $50,000 fee, All Team can pursue other remedies for the franchisee's breach.