What constitutes prima facie proof of the purchase money security interest created by the 1-800-GOT-JUNK? General Security Agreement?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
The security interest created hereby shall be a purchase money security interest to the extent that any of the Obligations are monies advanced by the Secured Party to enable the Debtor to purchase or otherwise acquire any of the Collateral and were so used and, without limitation, a certificate of an officer of the Secured Party as to the extent that the Obligations are monies so advanced shall be prima facie proof of the purchase money security interest created hereby.
Source: Item 22 — Contracts (FDD page 24)
What This Means (2025 FDD)
According to 1-800-GOT-JUNK?'s 2025 Franchise Disclosure Document, a certificate from an officer of the Secured Party (1-800-GOT-JUNK? LLC) can serve as prima facie proof of the purchase money security interest. This applies to the extent that the obligations outlined in the General Security Agreement are monies advanced by 1-800-GOT-JUNK? to enable the Debtor (the franchisee) to purchase or acquire any of the Collateral (assets subject to the security interest), and that these funds were indeed used for that purpose.
In simpler terms, if 1-800-GOT-JUNK? provides funds to a franchisee to buy equipment or vehicles necessary for the 1-800-GOT-JUNK? business, a certificate from a 1-800-GOT-JUNK? officer stating that these funds were advanced for this purpose is considered initial proof that 1-800-GOT-JUNK? has a purchase money security interest in those assets. This means 1-800-GOT-JUNK? has a legal claim on the assets until the franchisee repays the advanced funds.
This clause is significant for a prospective 1-800-GOT-JUNK? franchisee because it clarifies how 1-800-GOT-JUNK? can establish its security interest in assets financed by them. The certificate from an officer simplifies the process of proving that the security interest exists, placing the initial burden of proof on the franchisee to dispute it if they disagree. It is important for the franchisee to keep accurate records of how any advanced funds are used to ensure clarity and avoid potential disputes regarding the security interest.