Under the All Team agreement, can the Secured Party discharge any lien on the collateral?

According to All Team's 2025 Franchise Disclosure Document, the Secured Party has the right to discharge any lien on the collateral. Specifically, the Secured Party, at its option, may discharge any lien levied or placed on the collateral at any time. The Debtor (franchisee) is responsible for immediately reimbursing the Secured Party for any costs and expenses incurred in discharging the lien, as well as the costs of insuring, maintaining, and preserving the collateral.

This provision in the All Team franchise agreement grants significant power to the Secured Party (franchisor) regarding the collateral. It ensures the franchisor can act swiftly to protect its interest in the collateral without requiring prior consent from the franchisee. The franchisee bears the financial burden of these actions, which could include legal fees or other costs associated with resolving lien issues.

For a prospective All Team franchisee, this means understanding that the franchisor has broad authority over the collateral and can take actions, such as discharging liens, to protect its security interest. The franchisee should be prepared to cover any associated costs promptly. This clause is typical in secured lending agreements, as it allows the lender to protect its investment, but franchisees should carefully consider the potential financial implications and ensure they have sufficient capital to meet these obligations if they arise.