What is the effect of an attachment or garnishment against the debtor under the All Team agreement?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
Debtor agrees that the occurrence of any of the following events shall constitute a Default hereunder: (i) subject to any applicable notice or cure periods, the failure of Debtor to pay at maturity, or at any accelerated maturity, any of the Liabilities to Secured Party; (ii) the breach or failure to perform by Debtor any obligation, covenant, promise or agreement contained in this Agreement, and Debtor's failure to cure such breach or failure within fifteen (15) days after written notice thereof from Secured Party, or the breach or failure to perform by Debtor of any obligation, covenant, promise or agreement contained in any other agreement or contract to which Debtor and Secured Party are parties, subject to any applicable cure or grace periods, including the Funding Agreement and the Guaranty Agreement; (iii) any tax levy, attachment, garnishment, levy of execution or other process issued against Debtor or the Collateral; (iv) any Lien or security interest filed or created against the Collateral which is not expressly permitted by Secured Party; (v) the insolvency of Debtor, any bankruptcy or insolvency proceedings, or any assignment for the benefit of creditors commenced by or against Debtor or any accommodation party, surety or guarantor of any of the Liabilities; (vi) the dissolution, merger, consolidation or reorganization of Debtor; or (vii) the assignment by Debtor of any equity in any of the Collateral without the prior written consent of Secured Party.
- (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 any tax levy, attachment, garnishment, levy of execution or other process is issued against the Debtor or the Collateral, it constitutes an event of default under the Security Agreement.
Upon such a default, All Team has the right to declare all liabilities immediately due and payable, without further notice to the Debtor. All Team can also exercise the rights and remedies described in the Uniform Commercial Code in effect for the State of Florida, as well as any other rights and remedies available under applicable law. The Debtor is then obligated, at its own expense, to assemble the Collateral and make it available to All Team at a convenient place acceptable to All Team.
This clause in the All Team security agreement is fairly standard. It protects All Team's interest in the collateral by allowing them to take immediate action if the franchisee's assets become subject to legal claims by third parties. Prospective franchisees should understand that any financial distress leading to attachments or garnishments could trigger a default and potential loss of their franchise.