Under the All Team Processing Agreement, what is the relationship between ATFC and the USER?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
USER shall not have the power and shall not represent or imply that it has the power, to obligate ATFC for any liabilities or expenses, except as otherwise expressly agreed to in writing by ATFC.
Neither USER nor any individual whose compensation for services is paid by USER in any way, directly or indirectly, expressly or by implication, shall be construed to be an employee of ATFC for any purpose, including, without limitation any tax or withholding requirements levied or fixed by any governmental law, rule or regulation is solely responsible for the day-to-day operations of the Business.
- D. Indemnification. Under no circumstances shall ATFC be liable for any act, omission, debt, or other obligation of USER.
USER will indemnify, defend and save harmless ATFC and its employees, agents, officers, directors, parents, subsidiaries, affiliates, successors and assigns ("Indemnitees") from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, costs and expenses (including without limitation legal fees and expenses) of any kind and nature whatsoever, including without limitation damages or injuries suffered by Indemnitees, which may be imposed on, incurred by or asserted against the Indemnitees in any way arising out of the acts or omissions of USER or its employees, agents, officers, directors, parents, subsidiaries, affiliates, successors and assigns ("Indemnitors") pursuant to or relating to this Agreement or the transactions or relationships contemplated hereby or a breach or default by USER under this Agreement regardless of whether the Indemnities were negligent or that said negligence was a contributing factor in the liability.
- E. Assignment. This Processing Agreement is personal to USER and shall not be assignable or transferable by USER, in whole or in part, either voluntarily or by operation of law, except with the prior written consent of ATFC, which consent shall not unreasonably be withheld.
For all purposes of this Processing Agreement, the transfer of the majority of the equity of USER to persons other than the present owners thereof, or of any substantial portion of the Business in one or more transactions, shall be deemed an assignment of this Processing Agreement requiring such consent.
Any assignment must be in conjunction with a corresponding assignment under the Franchise Agreement.
Source: Item 23 — RECEIPT (FDD pages 34–161)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, the Processing Agreement outlines a specific relationship between All Team Franchise Corporation (ATFC) and the franchisee (USER). The USER does not have the authority to obligate ATFC for any liabilities or expenses unless expressly agreed to in writing by ATFC. Furthermore, neither the USER nor anyone paid by the USER is considered an employee of ATFC for any purpose, including tax or withholding requirements. The USER is solely responsible for the day-to-day operations of their business.
Under the Processing Agreement, All Team is not liable for any act, omission, debt, or other obligation of the USER. The USER is required to indemnify, defend, and hold harmless ATFC from any liabilities, losses, damages, penalties, claims, actions, costs, and expenses arising out of the USER's acts or omissions. This includes legal fees and expenses related to the agreement or any breach by the USER, regardless of negligence. This means the franchisee bears significant responsibility for their own actions and must protect All Team from any related legal or financial repercussions.
The Processing Agreement is personal to the USER and cannot be assigned or transferred without prior written consent from ATFC. A transfer of the majority of the USER's equity or a substantial portion of the business is considered an assignment of the Processing Agreement, requiring ATFC's consent. Any assignment must also align with a corresponding assignment under the Franchise Agreement. This ensures All Team maintains control over who operates under their brand and with whom they have a contractual relationship.
In essence, the Processing Agreement establishes a distinct business relationship where the franchisee operates independently and bears responsibility for their business's liabilities and obligations. All Team maintains control through restrictions on assignment and the requirement for indemnification, protecting its interests while providing processing services to the franchisee.