What is the definition of 'Collateral' in the 1-800-GOT-JUNK? General Security Agreement?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
II - SECURITY INTEREST 2.1 As general and continuing security for the payment and performance of the Obligations, the Debtor hereby grants to the Secured Party a security interest in, and assigns, charges, mortgages and pledges to and in favour of the Secured Party, all of the Debtor's present and after acquired goods, securities, instruments, documents of title, chattel paper, licenses, intangibles and money located on, relating to or arising in connection with a Franchised Business (as defined in the Franchise Agreement) including, without limitation, all vehicles, equipment and accessories and all proceeds from the foregoing wheresoever situate (collectively, the "Collateral"). 2.2 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, the General Security Agreement defines 'Collateral' as all of the Debtor's (the franchisee's) present and after-acquired goods, securities, instruments, documents of title, chattel paper, licenses, intangibles, and money. This property must be located on, relating to, or arising in connection with a Franchised Business.
In simpler terms, this means that 1-800-GOT-JUNK? has a security interest in essentially all assets connected to the franchise operation. This includes, but isn't limited to, vehicles, equipment, accessories, and any proceeds generated from these assets, no matter where they are located. This gives 1-800-GOT-JUNK? a broad claim over the franchisee's business assets as security for the franchisee's obligations.
The security interest also functions as a purchase money security interest to the extent that 1-800-GOT-JUNK? advances money to enable the Debtor to purchase or otherwise acquire any of the Collateral and were so used. A certificate of an officer of 1-800-GOT-JUNK? as to the extent that the obligations are monies so advanced shall be prima facie proof of the purchase money security interest created hereby.