What happens if the All Team debtor fails to pay liabilities at maturity?
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 the debtor fails to pay liabilities at maturity, it constitutes an event of default. Specifically, Item 22 outlines the 'Events of Default,' which include the failure to pay any of the liabilities to the secured party when due.
Upon such a default, All Team's secured party has several remedies. They can declare all liabilities immediately due and payable without further notice to the debtor. Additionally, the secured party can exercise 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 also required, at their own expense, to assemble the collateral and make it available to the secured party at a convenient place acceptable to them.
This means that if an All Team franchisee, acting as the debtor, fails to meet their financial obligations, All Team has the right to accelerate the debt, seize assets (collateral), and pursue legal remedies to recover the outstanding amounts. The franchisee is responsible for all costs associated with assembling and making the collateral available to All Team. This clause protects All Team by allowing them to quickly recover losses in case of franchisee financial instability.
Prospective All Team franchisees should understand the implications of this default clause and ensure they have sufficient financial resources to meet their obligations. It is also important to be aware of what assets are considered collateral and the potential consequences of failing to pay liabilities when they come due.