Under the All Team Franchise Agreement, what happens if the franchisee is in default?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
If termination is based on the foregoing, the FRANCHISEE shall be entitled to written notice of default, but ATFC shall [if permitted by applicable law] be required to grant FRANCHISEE only ten (10) days to remedy such default.
ATFC has the right to termination this Agreement upon providing FRANCHISEE written notice of said termination.
Without Opportunity to Cure.
Notwithstanding anything contained herein to the contrary, if state law permits, ATFC shall be permitted to terminate the franchise immediately and without notice when the basis or grounds for cancellation is: (a) conviction of a felony or any other criminal misconduct which, in ATFC's opinion materially and adversely affects the operation, maintenance, reputation, or goodwill of the franchise; (b) fraudulent activity which, in ATFC's opinion, materially and adversely affects the operation, maintenance, reputation, or goodwill of the franchise; (c) abandonment of the franchise; (d) bankruptcy or insolvency of the FRANCHISEE; (e) the termination of any other agreement between FRANCHISEE and ATFC or its affiliates; (f) repeated failure or refusal to comply with the lawful provisions of this Agreement, (i.e., three (3) or more times in any twelve (12) month period) whether or not such failures or refusals are corrected after notice; or (g) any other act or omission which permits termination without notice and/or an opportunity to cure under applicable state law.
- B.
Termination By FRANCHISEE.
FRANCHISEE may terminate this Agreement if ATFC shall materially default in performance of any terms and conditions in this Agreement, after giving ATFC written notice within thirty (30) days thereof, and if the default has not been corrected within thirty (30) days after such notice, or if such default is incapable of being cured within thirty (30) days, such longer period of time as is necessary to cure such default, provided that ATFC has commenced curing such default within said thirty (30) day period and diligently pursues a cure.
- C.
Consequences of Termination.
Upon termination or expiration of this Agreement, for any reason whatsoever, all of FRANCHISEE's rights hereunder shall terminate.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, if a franchisee defaults, All Team Franchise Corporation (ATFC) will provide written notice, allowing only ten days to remedy the default, if permitted by law. However, ATFC can terminate the franchise immediately without notice under certain conditions, assuming state law allows. These conditions include conviction of a felony or criminal misconduct that adversely affects the franchise, fraudulent activity impacting the franchise, abandonment of the franchise, bankruptcy or insolvency of the franchisee, termination of any other agreement between the franchisee and ATFC, repeated failure to comply with the agreement (three or more times in a 12-month period), or any act that permits termination without notice under applicable state law.
Conversely, the franchisee can terminate the agreement if ATFC materially defaults on its obligations, providing written notice and a 30-day period for ATFC to correct the default. If the default cannot be cured within 30 days, All Team has a longer period to cure the default, provided they commence curing within the initial 30-day period and diligently pursue it. Upon termination or expiration of the agreement, all of the franchisee's rights are terminated.
These terms carry significant implications for prospective All Team franchisees. The franchisor's ability to terminate the agreement quickly under certain conditions highlights the importance of strict adherence to the franchise agreement and all applicable laws. The franchisee should be aware of the specific conditions that trigger immediate termination and understand their rights and obligations in such situations. Additionally, the franchisee should carefully consider the implications of termination, including the loss of all rights under the agreement.