Does the 1-800-GOT-JUNK? General Security Agreement specify any requirements for the Debtor to allow the Secured Party to inspect the Collateral?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
nterest in the Collateral; (m) pay, on demand of the Secured Party, all reasonable expenses, including legal fees and disbursements on a solicitor and own client basis, filing and discharge costs, site investigation costs, appraisal costs, inspection costs, and all the remuneration of any receiver appointed hereunder or by court order, or incurred by the Secured Party in the preparation, attachment, perfection, enforcement or discharge of this Agreement or the security interest created thereby; (n) not use the Collateral or any part thereof or acquire any after acquired property primarily for personal, family or household purposes or otherwise as Consumer Goods; and (o) not permit any of the Collateral to be removed from the jurisdiction in which it is situate, or permit the Collateral to become an accession or a fixture to any other property other than other Collateral. ARTICLE VI - MAINTAINING THE SECURITY INTEREST 6.1 The Debtor shall pay all expenses and, upon request, take any action reasonably deemed advisable by the Secured Party to preserve the Collateral or to establish, determine the priority of, perfect, continue perfected, terminate or enforce the Secured Party's interest or rights in it under this Agreement.
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 outlines the debtor's responsibilities regarding the collateral. Specifically, the Debtor is obligated to pay, on demand, all reasonable expenses, including inspection costs, incurred by the Secured Party in the preparation, attachment, perfection, enforcement or discharge of the agreement or the security interest created. This indicates that the Debtor is responsible for covering the costs associated with inspections of the collateral.
Furthermore, the Debtor is required to take any action reasonably deemed advisable by the Secured Party to preserve the Collateral or to establish, determine the priority of, perfect, continue perfected, terminate, or enforce the Secured Party's interest or rights in it under the agreement. If the Debtor fails to act as required by the agreement, the Secured Party is authorized to take any such action in the Debtor's name, including signing the Debtor's name or paying any amounts so required. The cost thereof becomes a debt owing to the Secured Party and forms part of the Obligations.
In practical terms, this means that as a 1-800-GOT-JUNK? franchisee, you are responsible for the costs of any inspections that 1-800-GOT-JUNK? deems necessary to protect their security interest in the collateral. You must also comply with any requests from 1-800-GOT-JUNK? to take actions that preserve the collateral or their rights. Failure to comply could result in 1-800-GOT-JUNK? taking action on your behalf, with the costs being added to your debt to them. This arrangement protects 1-800-GOT-JUNK?'s investment and ensures that the collateral maintains its value and can be easily recovered if necessary.