Is an All Team USER allowed to take possession of customer payments?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
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 (franchisee) is generally restricted from taking possession of customer payments. The document states that the franchisee should not take possession of, receive, endorse, or collect any sum in payment of Accounts Receivables. This is because All Team Franchise Corporation (ATFC) purchases the Accounts Receivable from the USER.
However, if a customer makes a payment directly to the USER, the USER is required to forward the payment to ATFC immediately. The payment is deemed to be received by the USER on behalf of ATFC, essentially holding it in trust. Failure to remit these payments to ATFC can result in the termination of the Funding Agreement and other agreements with ATFC. In such cases, All Team is entitled to legal remedies, and the USER may be subject to civil remedies, including covering All Team's attorney's fees.
This arrangement ensures that All Team maintains control over the collection of Accounts Receivable, which is a critical aspect of their financing services for the franchisee's temporary service business. The strict enforcement of this policy, with penalties for non-compliance, highlights the importance All Team places on managing the financial transactions and maintaining ownership of the receivables. This is not uncommon in franchise systems where the franchisor provides financial services or manages billing and collections on behalf of franchisees.