Can an All Team franchisee pledge the collateral to any person other than the Secured Party?

According to All Team's 2025 Franchise Disclosure Document, a franchisee is generally prohibited from pledging collateral to anyone other than the Secured Party, which is All Team Franchise Corporation. The agreement states that the franchisee covenants not to pledge the collateral to any person other than the Secured Party and must keep the collateral free of all liens except those permitted by All Team. This restriction is in place to protect All Team's security interest in the collateral.

This means that as an All Team franchisee, you will likely need written permission from All Team to use the collateral for any financing beyond what they initially approve. This could impact a franchisee's ability to obtain additional financing using business assets as collateral without All Team's consent.

The FDD also states that the Debtor (franchisee) shall defend the collateral against the claims and demands of all persons at any time claiming an interest in the collateral. This reinforces the franchisee's responsibility to protect All Team's interest in the collateral and to ensure that no other party can claim a superior right to it. This is a fairly standard practice in franchising, as franchisors typically want to maintain control over the assets used in the business to protect their brand and ensure consistent operations across all locations.