Does the 1-800-GOT-JUNK? General Security Agreement specify any requirements for the Debtor to execute any documents necessary to perfect the security interest?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
(j) do, make and execute, from time to time at the Secured Party's request, all such financing statements, further assignments, documents, acts, matters and things as may be reasonably required by the Secured Party with respect to the Collateral or any part thereof or as may be required to give effect to these presents, and the Debtor hereby constitutes and appoints the Secured Party or any receiver, manager or receiver-manager appointed by the Court or the Secured Party as hereafter set out (all of whom are hereinafter referred to as the "Receiver"), the true and lawful attorney and agent of the Debtor irrevocably with full power of substitution to do, make and execute all such assignments, documents, acts, matters or things with the right to use the name of the Debtor whenever and wherever it may be deemed necessary or expedient.
The Receiver shall, from the date of the appointment, be an agent and officer of the Debtor.
The Debtor shall be solely responsible for the acts, costs, defaults and remuneration of the Receiver and the Secured Party shall bear no liability therefor;
(k) give immediate notice to the Secured Party in the event of a change of the individual, corporate or trade name or of a change of the residential or business address of the Debtor;
(l) give immediate notice to the Secured Party of any sale of any of the Collateral and of the serial number, year, make and model of all Serial Numbered Goods at any time included in the Collateral or such other information as may be necessary from time to time for Secured Party to properly perfect its security interest 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;
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 perfection of the security interest. Specifically, the debtor, who is the franchisee, must execute all financing statements, further assignments, documents, acts, matters, and things reasonably required by 1-800-GOT-JUNK? to give effect to the agreement. This includes any actions needed to properly secure 1-800-GOT-JUNK?'s interest in the collateral. The agreement also grants 1-800-GOT-JUNK? the power of attorney to act on behalf of the franchisee in executing these documents if necessary. This ensures that 1-800-GOT-JUNK? can take the necessary steps to protect its security interest in the franchisee's assets.
In addition to executing necessary documents, the 1-800-GOT-JUNK? franchisee must provide immediate notice to 1-800-GOT-JUNK? in the event of any changes to their individual, corporate, or trade name, or any changes to their residential or business address. They must also notify 1-800-GOT-JUNK? of any sale of collateral, including the serial number, year, make, and model of all serialized goods included in the collateral. This ensures that 1-800-GOT-JUNK? maintains accurate records of the collateral and can properly perfect its security interest.
Furthermore, the 1-800-GOT-JUNK? franchisee is responsible for paying all reasonable expenses related to the security agreement. This includes legal fees, filing and discharge costs, site investigation costs, appraisal costs, inspection costs, and the remuneration of any receiver appointed. These costs can be incurred during the preparation, attachment, perfection, enforcement, or discharge of the agreement or the security interest it creates. This means the franchisee bears the financial burden of ensuring the security agreement is properly implemented and maintained.
This requirement is typical in franchising, where franchisors take a security interest in the franchisee's assets to protect their investment and ensure compliance with the franchise agreement. Prospective 1-800-GOT-JUNK? franchisees should carefully review the General Security Agreement and understand their obligations regarding the perfection of the security interest, as well as the potential costs involved.