What is the All Team franchisee prohibited from doing with the collateral regarding real property?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
Debtor authorizes Secured Party to file, in jurisdictions where this authorization will be given effect, a financing statement signed only by Secured Party and describing the Collateral in substantially the same manner as it is described in this Agreement.
In addition, Debtor appoints Secured Party as Debtor's attorney-in-fact with full power and authority to sign any financing statement, including, without limitation, UCC-1s and UCC-3s, covering the Collateral on behalf of Debtor.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
Based on the 2025 All Team Franchise Disclosure Document excerpts provided, there is no information about specific prohibitions on what a franchisee can do with collateral, particularly real property. The excerpts focus on various contractual obligations, including the franchisor's right to purchase personal property upon termination, restrictions on using All Team's trademarks, conditions under which the franchisor can operate the franchise, and stipulations regarding financing statements.
While the excerpts discuss collateral in the context of filing financing statements, they do not detail any restrictions on the franchisee's use, sale, or encumbrance of real property used as collateral. The document mentions the Debtor authorizing the Secured Party to file financing statements and appointing the Secured Party as the Debtor's attorney-in-fact to sign financing statements covering the collateral. This indicates that collateral is involved in securing obligations, but the specifics of what the franchisee is prohibited from doing with it are not outlined.
To fully understand any restrictions on the use of real property as collateral, a prospective All Team franchisee should review the complete Franchise Agreement and related documents, specifically those sections dealing with collateral, security interests, and financing. It would be prudent to consult with a legal professional to clarify the franchisee's rights and obligations regarding any real property used as collateral for the franchise agreement.