For All Team, what is the effect of any interested person relying on the Secured Party's written statement?

According to All Team's 2025 Franchise Disclosure Document, an affidavit or written statement from the Secured Party (or their agent, officer, or attorney) asserting that any portion of the liabilities remains unpaid serves as conclusive evidence of the continuing effectiveness of the security agreement. This means that any interested person is authorized to rely on this statement.

For a prospective All Team franchisee, this clause has significant implications. It essentially means that if the Secured Party provides a written statement indicating that the franchisee (Debtor) still owes money, that statement is considered conclusive evidence that the security agreement is still in effect. This could impact the franchisee's ability to sell the business, obtain additional financing, or take other actions that require clear title to the assets.

This clause is designed to protect the Secured Party's interests by simplifying the process of proving that the debt is still outstanding. However, it places a significant burden on the franchisee to ensure that all liabilities are fully paid and that they obtain proper documentation of the termination of the security agreement from the Secured Party. Franchisees should ensure they receive and retain documentation of all payments and the final termination of the agreement to protect themselves from potential disputes based on the Secured Party's written statement.