What collateral is subject to the security interest granted to ATFC in the All Team Security Agreement?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
d in a bankruptcy or other insolvency proceeding). Any such charge back shall not be deemed to constitute a reassignment of the purchased Account Receivable, and ATFC shall retain a security interest therein. In the event that ATFC is required to make any payment of the type described in clause (e) above after the termination of this Agreement, USER shall, on demand, reimburse ATFC the full amount of any such payment. Such reimbursement obligation shall survive the termination of this Agreement.
- VIII. Security Interest in USER. In connection with the execution of this Funding Agreement, USER agrees to enter into a Security Agreement in the form attached hereto as Exhibit A, which grants to ATFC a security interest in collateral described therein (the "Security Agreement").
Source: Item 23 — RECEIPT (FDD pages 34–161)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, the Funding Agreement requires the franchisee (referred to as USER) to enter into a Security Agreement. This agreement grants All Team Franchise Corporation (ATFC) a security interest in the collateral described within that Security Agreement.
All Team relies on the franchisee's representations, warranties, and covenants made in both Section VIII of the Funding Agreement and the Security Agreement itself. Any misrepresentation, breach, or failure related to these items allows All Team to immediately terminate the Funding Agreement.
Upon termination or expiration of the Funding Agreement, All Team will reassign any security interest or other interest in the franchisee's collateral back to the franchisee once all outstanding Accounts Receivable are paid. However, until full payment is made to All Team, the franchisee must continue to fulfill all obligations related to those Accounts Receivable, even after the Funding Agreement has ended. The specific details of the collateral are found in the Security Agreement, which is attached as Exhibit A to the Funding Agreement.