Is an All Team USER allowed to send bills or statements to customers?
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 is generally restricted from rendering bills or statements to customers. Specifically, the Funding Agreement states that unless specifically permitted, the USER shall not render bills or statements to its Customers. This restriction is in place to ensure that All Team maintains control over the accounts receivable and the collection process.
This arrangement is tied to All Team's role in purchasing the Customer Invoices from the USER. By purchasing these invoices, All Team gains the right to manage and enforce collections. If a USER does receive a customer payment, it is deemed to be held in trust for All Team and must be immediately forwarded to them. Failure to do so can result in the termination of the Funding Agreement and potential legal action.
This policy has significant implications for a prospective All Team franchisee. It means that the franchisee will not have direct control over billing and collections, which are handled by All Team. While this may reduce the administrative burden on the franchisee, it also means they are dependent on All Team's efficiency and effectiveness in managing these processes. Franchisees need to ensure they understand the procedures for submitting necessary documentation, such as timecards and invoices, to All Team in a timely manner, as delays can result in fines ranging from $1,000 to $5,000.
Furthermore, the franchisee must be aware that All Team has the right to modify payment terms, settle or compromise amounts owing, and issue credits to customers. While All Team is expected to act in a reasonable manner, the franchisee has limited control over these decisions. It is important for prospective franchisees to carefully review the terms of the Funding Agreement and Processing Agreement to fully understand their rights and obligations in this area.