What is the All Team debtor required to do at its expense regarding the Collateral upon default?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Remedies*.* Upon the occurrence of a Default and at any time thereafter (i) Secured Party may declare all Liabilities secured by this Agreement or any of them (notwithstanding any provisions of them) to be immediately due and payable, and the same thereupon will be due and payable without further notice to Debtor; (ii) Secured Party may exercise from time to time the rights and remedies described in the Uniform Commercial Code in effect for the State of Florida and any other rights and remedies available to it under any other applicable law, and (iii) Debtor, at its expense, shall assemble the Collateral and make it available to Secured Party at a convenient place acceptable to Secured Party.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, if a default occurs, the debtor is required to assemble the collateral at their own expense. The debtor must then make the assembled collateral available to the secured party. This assembly must take place at a location that is convenient and acceptable to the secured party.
This means that if an All Team franchisee defaults on their agreement, they will be responsible for gathering all assets used as collateral for the agreement. This could include equipment, inventory, or other property specified in the security agreement. The franchisee will bear the cost of collecting and preparing these assets for the secured party.
For a prospective All Team franchisee, this highlights the importance of understanding the terms of the security agreement and the potential consequences of default. Franchisees should carefully consider the financial implications of this obligation and ensure they have a plan in place to meet it if necessary. It is also important to maintain a clear understanding of what assets are considered collateral and their location to facilitate efficient assembly if required.