Under what conditions can the All Team franchisor terminate the franchise agreement with cause?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
his Agreement to include such entity.
XII. DEFAULT AND TERMINATION
A. Termination By ATFC.
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- 30 Day Opportunity to Cure. ATFC may at its option, and without prejudice to any other rights or remedies provided for in this Agreement or at law or in equity, terminate this Agreement for "good cause". Without limitation as to other situations, good cause for termination also exists if FRANCHISEE or any guarantor of this Agreement:
- (1) Does not substantially perform any and all of the lawful terms, conditions, and obligations of this Agreement, or the mandatory requirements under the Confidential Operations Manual; or
- (2) Loses possession of the premises at which the Agency is located and fails to secure a suitable site for relocation which ATFC consents to within three (3) months thereafter; or defaults under the terms of its lease for the premises; or
- (3) Misrepresents any of the billings upon which the Fees are calculated that FRANCHISEE is required to report to ATFC; or
- (4) Loses any permit or license which is a prerequisite to the operation of the Agency for a period of five (5) days; or
- (5) Misuses any of the Marks or confidential information, or engages in conduct which reflects unfavorably, in ATFC's opinion upon the operation, maintenance, goodwill and/or reputation of the franchise Systems; or
- (6) Is adjudged bankrupt, becomes insolvent, or makes a general assignment for the benefit of creditors (subject to Section XII.A.3.(d) below); or
- (7) Commits any other act which constitutes good cause under applicable state law or court decisions; or
- (8) Fails to provide ATFC with the timely reports of sales and other statistical and business information as required under this Agreement; or
- (9) Engages in any illegal, fraudulent, unfair or deceptive business practice, which, in ATFC's opinion, adversely affects the operation, maintenance, or goodwill of the franchise; or
- (10) Fails to keep the Agency open for a period of seven (7) consecutive days without justifiable cause; or
- (11) Fails to pay its lawful debts and any and all taxes when same become due; or
- (12) Fails to properly service customers in accordance with ATFC's standards and within the spirit and intent of this Agreement. (By way of illustration and not limitation, a failure to properly service customers, will occur if at least three unresolved customer complaints are made regarding the services rendered by the Agency within any consecutive ninety (90) day period because of dissatisfaction with services provided by the Agency.); or
- (13) Makes any material misrepresentations in any information or documents FRANCHISEE provides ATFC in order to purchase the franchise; or
- (14) Makes an assignment or Transfer in violation of this Agreement; or
- (15) Diverts or collects any fees from customers in violation of Section VII.F, above, which provide that customer billings are to be done by ATFC; or
- (16) Defaults under the terms of the Funding Agreement and/or Processing Agreement.
Subject to applicable law and except as otherwise provided in this Agreement, ATFC will give the FRANCHISEE at least thirty (30) days' prior written notice of termination, [unless a longer period of time is required or shorter period of time is permitted by applicable state law]. The notice shall state the reason(s) for termination and shall provide that the FRANCHISEE has thirty (30) days from the date of said notice to correct any claimed deficiency. If the deficiency is corrected within thirty (30) days, the notice shall be void.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 28–30)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, the franchisor, ATFC, can terminate the franchise agreement with cause under several conditions. These include failing to substantially perform the terms of the agreement or the mandatory requirements in the Confidential Operations Manual. Other causes include losing possession of the premises and failing to secure a suitable relocation site within three months, defaulting on the lease, or misrepresenting billings used to calculate fees.
Additional causes for termination include losing a necessary permit or license for five days, misusing trademarks or confidential information, or engaging in conduct that negatively impacts the franchise system's reputation. All Team can also terminate the agreement if the franchisee is adjudged bankrupt, becomes insolvent, makes an assignment for the benefit of creditors, or commits any act that constitutes good cause under state law or court decisions. Failing to provide timely sales reports, engaging in illegal or deceptive business practices, failing to keep the agency open for seven consecutive days without justification, or failing to pay lawful debts and taxes also constitute grounds for termination.
In many of these cases, All Team must provide written notice of default and, if permitted by law, give the franchisee ten days to remedy the default. However, in certain situations, All Team can terminate the franchise immediately without notice if state law permits. These situations include conviction of a felony, fraudulent activity, abandonment of the franchise, bankruptcy or insolvency of the franchisee, termination of another agreement between the franchisee and All Team, repeated failure to comply with the agreement (three or more times in a 12-month period), or any other act that allows termination without notice under applicable state law.
It is important to note that if the termination is based on any of the above reasons, the franchisee is entitled to written notice of default, but All Team is only required to grant ten days to remedy the default if permitted by applicable law. Franchisees should be aware of these conditions and ensure they comply with all terms of the franchise agreement to avoid potential termination.