If Anago fails to pay taxes on the collateral, can the Secured Party make those payments?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
To pay before delinquency, all taxes, assessments and liens now or hereafter imposed on the Collateral, and to maintain in force at all times, fire and other insurance policies (including all risk, and earthquake insurance) on the Collateral.
If Debtor fails to make any payment or do any act as herein required, then Secured Party, without obligation to do so and without notice to or demand upon Debtor, may make such payments and do such acts as Secured Party may deem necessary to protect its security interest in the Collateral, Secured Party being hereby authorized (without limiting the general nature of the authority hereinabove conferred) to take possession of the Collateral or any part thereof and to pay, purchase, contest or compromise any security interest, encumbrance, charge or lien which, in the judgment of Secured Party, appears to be prior or superior to or to jeopardize the security interest granted hereby, and in exercising any such powers and authority to incur necessary expenses, including attorneys' fees.
Debtor hereby agrees to repay immediately and without demand all sums expended by Secured Party pursuant to the provisions of this paragraph.
Debtor shall be in default under this Agreement upon the happening of any of the following events or conditions:
(a) Default by Debtor in the payment of any or all of the indebtedness, obligations or liabilities secured hereby beyond the applicable cure periods, or failure by Debtor to perform any agreement herein contained or secured hereby.
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Upon any such default, Secured Party, at its option, without demand upon or notice to Debtor, may declare all indebtednesses, obligations and liabilities secured hereby to be immediately due and payable, and Secured Party shall have all the rights and remedies provided a secured party under the Uniform Commercial Code and may proceed to foreclose the security interest created hereby according to law, and may, at its option, and it is hereby empowered, with or without foreclosure action, to enter upon the Premises or any other premises where the Collateral or any part thereof may be and take possession thereof and remove the Collateral or any part
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the Secured Party has the option to pay taxes, assessments, and liens on the collateral if the Debtor (Anago franchisee) fails to do so. This is to protect the Secured Party's interest in the collateral. The Secured Party can also maintain fire and other insurance policies, including all-risk and earthquake insurance, on the collateral.
If the Anago franchisee fails to make any required payments or perform any necessary act, the Secured Party can make those payments or acts without needing to notify the franchisee. This includes taking possession of the collateral and paying, purchasing, contesting, or compromising any security interest, encumbrance, charge, or lien that could jeopardize the Secured Party's security interest. The Secured Party is authorized to incur necessary expenses, including attorney's fees, while exercising these powers.
The Anago franchisee is obligated to immediately repay all sums expended by the Secured Party under these provisions. Failure to meet these obligations constitutes a default under the agreement, which allows the Secured Party to declare all secured indebtedness immediately due and payable. The Secured Party can then exercise all rights and remedies available under the Uniform Commercial Code, including foreclosing on the security interest and taking possession of the collateral.