Who is responsible for reimbursing the Secured Party for costs incurred in insuring, maintaining, and preserving the All Team collateral?

According to All Team's 2025 Franchise Disclosure Document, the Debtor is responsible for reimbursing the Secured Party for costs related to insuring, maintaining, and preserving the collateral. Specifically, the Secured Party has the option to pay the costs of insuring, maintaining, and preserving the collateral, and the Debtor is obligated to immediately reimburse the Secured Party for any such costs and expenses incurred. This obligation is part of the Security Agreement between the Debtor and All Team Franchise Corporation, where All Team acts as the Secured Party.

This means that as an All Team franchisee (the Debtor), you are responsible for covering expenses that All Team (the Secured Party) incurs to protect the collateral. Collateral refers to assets pledged as security for a loan or obligation. These costs can arise from actions All Team takes to protect its interest in the collateral, such as insuring it against damage or maintaining its condition to preserve its value.

The requirement for the Debtor to reimburse the Secured Party for these costs ensures that All Team's investment is protected and that the franchisee bears the financial responsibility for maintaining the collateral's value. This is a fairly standard practice in secured lending agreements, as it protects the lender from losses due to the collateral's deterioration or unforeseen expenses. As a prospective franchisee, it is important to understand the types of costs that could be incurred and to factor these potential expenses into your financial planning.