What is the process for the Secured Party to foreclose the security interest created by Anago?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) Secured Party, at its option, shall have the right to commence any action or proceeding against a third party or appear in or defend any action or proceeding brought by a third party purporting to affect the rights, duties or liabilities of the parties hereto, including, without limiting the generality of the foregoing, an action to foreclose the security interest created hereby, and in connection therewith to incur costs, expenses and attorneys' fees in any such action or proceeding in which the Secured Party shall appear, all of which costs, expenses and attorneys' fees will be paid or reimbursed to Secured Party by Debtor.
- (b) In the event of any default hereunder, Secured Party shall be entitled, without notice and without regard to the adequacy of the Collateral and of any other security for the indebtedness hereby secured, to the appointment of a receiver to take possession of all or any part of the Collateral and to exercise such powers as the Court shall confer upon him.
- (c) At any public sale or sales made under this Section 9 or authorized herein or by laws, or at any sale or sales made upon judicial foreclosure of this security interest, Secured Party (or its representative) may bid for and purchase any Collateral being sold and, in the event of such purchase, shall hold such property thereafter discharged of all rights of redemption.
-
- Secured Party shall be entitled to enforce any indebtedness, obligation or liability secured hereby and to exercise all rights and powers hereby conferred, although some or all of the indebtedness, obligations and liabilities secured hereby are now or shall hereafter be otherwise secured. Debtor's acceptance of this Agreement shall not affect or prejudice Secured Party's right to realize upon or enforce any other security now or hereafter held by Secured Party, and Secured Party shall be entitled to exercise all rights of set-off to the same effect and in the same manner as if this security interest had not been given.
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 right to initiate actions against a third party, including foreclosure, to protect their rights and interests. In such cases, the debtor (franchisee) is responsible for covering all associated costs, expenses, and attorney's fees incurred by the secured party. This means that if Anago, as the secured party, has to take legal action to foreclose on the security interest, the franchisee will be required to pay for those legal costs.
In the event of a default, Anago can seek the appointment of a receiver without prior notice and regardless of the collateral's adequacy. This receiver would take possession of the collateral and exercise powers granted by the court. This allows Anago to protect its investment and ensure business continuity in case of franchisee default.
Furthermore, Anago or its representative can bid for and purchase any collateral at a public sale or judicial foreclosure, and upon purchase, the property will be discharged of all redemption rights. This means Anago can recover its losses by purchasing the assets and reselling them. Anago can enforce the secured obligations and exercise its rights, even if the obligations are secured elsewhere, and can also exercise rights of set-off as if the security interest was not given. This provides Anago with multiple avenues for recovering debts and enforcing obligations, enhancing their security position.