Under what condition can All Team reduce the 80% advance on Accounts Receivables?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
The Funding Agreement provides that we will purchase your customer invoices which become our Accounts Receivables each week minus a Deferred Share. Currently this Deferred Share is 20% of the Accounts Receivables. We will advance to you the 80% balance of your Accounts Receivables less: (i) Funding Fee and Processing Fee; (ii) out-of-pocket expenses incurred by us on your behalf; (iii) any adjustments for Late Accounts or Delinquent Accounts; (iv) any discounts made available or extended to the Customer; and (v) Continuing License Fee, Advertising Fee, Technology Fee required under the Franchise Agreement, Funding Agreement and Processing Agreement and any other payments due ("Purchase Price"). The Purchase Price will be sent to you no later than Friday of each week based on the Accounts Receivables purchased for the prior week. You are responsible to deposit these amounts you receive from us into your business account to make sure adequate funds are in place to cover your payroll checks, related payroll taxes and operating expenses. In the event that our finance agreements with our banks are reduced, we have the right to reduce the 80% accordingly.
Source: Item 10 — FINANCING (FDD pages 17–18)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, All Team offers funding of temporary payrolls to franchisees based on the availability from their lending institutions and the franchisee's creditworthiness. If approved, the franchisee will sign a Funding Agreement where All Team purchases the franchisee's customer invoices (Accounts Receivables) each week, minus a Deferred Share, which is currently 20%. All Team advances the remaining 80% balance to the franchisee, less fees and other deductions.
All Team sends the Purchase Price to the franchisee no later than Friday of each week, based on the Accounts Receivables purchased for the prior week. The franchisee is then responsible for depositing these funds into their business account to cover payroll checks, related payroll taxes, and operating expenses.
However, All Team retains the right to reduce the 80% advance on Accounts Receivables if their finance agreements with their banks are reduced. This means that if All Team's own financing terms become less favorable, they can pass those changes on to the franchisees by decreasing the amount advanced on invoices. This condition introduces a potential risk for franchisees, as a reduction in the advance could impact their cash flow and ability to meet payroll obligations.