Can an All Team USER obligate ATFC for any liabilities or expenses?
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-operations of the Business.
- D. Indemnification. USER shall indemnify, defend and hold ATFC harmless from (i) any and all manner of suits, claims or demands resulting from or arising out of USER's acts or omissions or those of its employees or agents, including those under or related to this Funding Agreement or the transactions or relationships contemplated hereby, and (ii) any breach or default by USER under this Funding Agreement.
USER shall reimburse ATFC for any and all costs, damages, liabilities, losses, deficiencies, assessments and expenses, including reasonable attorney's fees and court costs that ATFC may suffer or incur or to which ATFC may be subject by reason of any of the foregoing.
Source: Item 23 — RECEIPT (FDD pages 34–161)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, a USER does not have the power to obligate ATFC (All Team Franchise Corporation) for any liabilities or expenses unless ATFC expressly agrees to it in writing. This limitation is reinforced by the independent contractor clause, which states that nothing in the Funding Agreement should be interpreted as creating an employer-employee or agent relationship, except as explicitly provided in the agreement.
Furthermore, the USER is required to indemnify, defend, and hold ATFC harmless from any suits, claims, or demands arising from the USER's actions or omissions, including those related to the Funding Agreement. This means the USER is responsible for covering ATFC's costs, damages, liabilities, losses, deficiencies, assessments, and expenses, including attorney's fees and court costs, that ATFC may incur due to the USER's actions or any breach of the Funding Agreement.
This arrangement is typical in franchising, where franchisees operate as independent entities and bear responsibility for their own liabilities. The franchisor, All Team in this case, aims to protect itself from potential financial or legal repercussions resulting from the franchisee's business operations. Prospective franchisees should carefully consider this indemnification clause and ensure they have adequate insurance and risk management strategies in place.