Under what circumstances does an All Team user have to pay a Dispute Resolution Fee?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
full force and effect subsequent to and notwithstanding the Transfer, or the termination or expiration of the term of this Agreement. The arbitration 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.
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- Dispute Resolution Fee. In the event that the USER or its guarantors have not complied with the provisions in this Section on Dispute Resolution, USER shall reimburse ATFC for all of its expenses incurred in curing the USER'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"). USER acknowledges and agrees that the ATFC will be damaged by such breach. USER agrees that a
Source: Item 23 — RECEIPT (FDD pages 34–161)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, a franchisee, referred to as a USER, may be subject to a Dispute Resolution Fee of $50,000 if they or their guarantors fail to comply with the dispute resolution provisions outlined in the agreement. In such instances, the USER is also responsible for reimbursing All Team Franchise Corporation (ATFC) for all expenses incurred in rectifying the breach, including legal fees and costs associated with dismissing or responding to any improperly filed claims.
The FDD emphasizes that All Team will be damaged by a breach of the dispute resolution provisions and that calculating the full extent of these damages is difficult. Therefore, the parties agree that the $50,000 Dispute Resolution Fee is a reasonable estimate of damages and constitutes liquidated damages rather than a penalty. This fee aims to provide certainty and resolution in the event of a dispute.
All Team retains the right to collect the Dispute Resolution Fee in addition to any other rights they may have for non-compliance under the agreement. This means that franchisees need to adhere strictly to the dispute resolution procedures to avoid incurring this significant fee and other potential penalties. Prospective franchisees should carefully review the dispute resolution section of the franchise agreement to fully understand their obligations and the potential financial consequences of non-compliance.