Does the 1-800-GOT-JUNK? General Security Agreement specify any requirements for the Debtor to cooperate with the Secured Party in enforcing the security interest?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
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. If the Debtor fails to act as required by this Agreement, the Secured Party is authorized, in the Debtor's name, to take any such action, including without limitation, signing the Debtor's name or paying any amounts so required, and the cost thereof shall be a debt owing to the Secured Party and form part of the Obligations.
Source: Item 22 — Contracts (FDD page 24)
What This Means (2025 FDD)
According to the 2025 FDD, the General Security Agreement outlines the debtor's responsibilities in maintaining the security interest granted to 1-800-GOT-JUNK?. Specifically, the debtor is required to take actions deemed advisable by 1-800-GOT-JUNK? to protect their rights and interests in the collateral. This includes actions to establish, determine the priority of, perfect, continue perfected, terminate, or enforce 1-800-GOT-JUNK?'s security interest under the agreement.
If a 1-800-GOT-JUNK? franchisee (the Debtor) fails to fulfill these obligations, 1-800-GOT-JUNK? (the Secured Party) is authorized to act on behalf of the franchisee. This includes signing the franchisee's name or paying required amounts. Any costs incurred by 1-800-GOT-JUNK? in taking such actions become a debt owed by the franchisee to 1-800-GOT-JUNK? and are added to the franchisee's existing obligations.
This clause ensures that 1-800-GOT-JUNK? can take necessary steps to protect its security interest in the collateral, even if the franchisee is unwilling or unable to do so. It also makes the franchisee responsible for any expenses incurred by 1-800-GOT-JUNK? in this process, which could include legal fees or other costs associated with enforcing the security interest.