Does Anago need to be notified before the Secured Party takes possession of the Collateral after default?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
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
thereof. In addition, Secured Party may require and Debtor agrees to assemble the Collateral and make it available to Secured Party at a place to be designated by Secured Party which is reasonable convenient to both parties. Unless the Collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, Secured Party will give Debtor reasonable notice of the time and place of any public sale thereof or of the time after which any private or other intended disposition is to be made. The requirements of reasonable notice shall be met if such notice is mailed, postage prepaid, to the address of Debtor shown above at least ten (10) days before the time of the sale or disposition. The Collateral may be sold in one or more lots and at one or more sales, which may be held on different days and need not be held within view of the Collateral being sold. Secured Party shall deduct and retain from the proceeds of such sale or sales all costs and expenses paid or incurred in the taking, removal, holding, preparing for sale or sales of the Collateral, including any reasonable attorneys' fees and legal expenses incurred or paid by Secured Party; the balance of the proceeds shall be applied by Secured Party upon the indebtedness's, obligations and liabilities secured hereby, in such order and manner as Secured Party may determine, and the surplus, if any, shall be paid to Debtor or to the person or persons lawfully entitled to receive the same.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, in the event of a default, the Secured Party has the option to declare all debts immediately due and payable without demand or notice to the Debtor. The Secured Party has all the rights and remedies provided under the Uniform Commercial Code, allowing them to foreclose the security interest. They can enter the premises where the collateral is located and take possession of it, with or without a foreclosure action.
Furthermore, Anago's Secured Party may require the Debtor to assemble the collateral and make it available at a designated location. Unless the collateral is perishable, declining in value, or customarily sold on a recognized market, the Secured Party will provide the Debtor with reasonable notice of any public sale or disposition. This notice is considered reasonable if mailed at least ten days before the sale or disposition to the Debtor's address.
In summary, Anago does not need to provide notice to the Debtor (franchisee) before taking possession of the collateral after default, although a notice of sale is required unless the collateral is perishable or of rapidly declining value. This is a significant point for prospective franchisees to understand, as it outlines the conditions under which Anago can seize assets in the event of a default.