Under what circumstances is an All Team USER specifically permitted to receive customer payments?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
D. Restriction of Receipt of Customer Payments**.** Except as USER is specifically permitted hereunder, USER shall not (i) render bills or statements to its Customers, (ii) take possession of, receive, endorse or collect any sum or other consideration in payment of any Accounts Receivables, or (iii) take or omit to take any other step or act which might reasonably be assumed to interfere with or delay Customers' payment and ATFC's collection of any Accounts Receivable. If payment of any bill or statement, whether rendered by ATFC or USER, is made to or received by USER, such payment shall be deemed to have been received by USER on behalf of and in trust for ATFC, and USER shall immediately forward the same, properly endorsed, if necessary, to ATFC. Failure to immediately remit to ATFC any customer payments that may come into USER's possession shall constitute a conversion of ATFC's funds for which this Funding Agreement and any other agreement with ATFC may, without prejudice to any of ATFC's other rights, be immediately terminated at ATFC's election. In the event of such a termination, ATFC is entitled to all remedies at law or in equity and for which USER may be subject to civil remedies, including reimbursement of its attorney's fees in connection with such a proceeding.
Source: Item 23 — RECEIPT (FDD pages 34–161)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, a USER (franchisee) is generally restricted from receiving customer payments directly. However, there are specific circumstances where a USER might receive payments. If a USER does receive any payment from a customer, it is deemed to be held on behalf of All Team Financial Center (ATFC). The USER is then obligated to immediately forward the payment to ATFC, properly endorsed if necessary.
Failure to promptly remit these customer payments to ATFC is considered a breach of the agreement. Specifically, it's treated as a conversion of ATFC's funds. This can lead to immediate termination of the Funding Agreement and any other agreements with ATFC, without affecting ATFC's other legal rights. In such cases, ATFC is entitled to legal remedies, and the USER may face civil actions, including covering ATFC's attorney fees.
While the document outlines the consequences of a USER receiving payments, it does not explicitly detail the circumstances under which a USER is specifically permitted to receive customer payments. The FDD states, "Except as USER is specifically permitted hereunder..." implying there are exceptions, but it does not elaborate on what those exceptions are. A prospective franchisee should seek clarification from All Team regarding the specific situations where they are allowed to receive customer payments, as this is a critical aspect of managing the financial relationship between the franchisee, the franchisor, and the customers.