What is Anago required to do if the Secured Party expends sums to protect its security interest?

According to Anago's 2025 Franchise Disclosure Document, the subfranchisee (Debtor) is responsible for repaying all sums and amounts that may be advanced or expended by the secured party (Anago) for the maintenance and preservation of the collateral or any part thereof or the enforcement of any rights of Secured Party. This repayment obligation is secured by the security interest granted by the subfranchisee to Anago. The collateral includes all of the Debtor's business assets. These business assets include accounts receivable, books and records, equipment, furniture, fixtures, contracts, Anago Unit Franchise Agreements, promissory notes, leases, intangible rights, and proceeds from the sale of any of the aforementioned assets.

In simpler terms, if Anago, as the secured party, spends money to protect the assets of the subfranchisee's business (the collateral) or to enforce its rights under the agreement, the subfranchisee is obligated to repay Anago for those expenses. This ensures that Anago can take necessary actions to safeguard its investment and the integrity of the Anago franchise system without incurring a financial loss. The agreement specifies that the security interest covers a wide range of business assets, providing Anago with a comprehensive claim against the subfranchisee's business in case of default.

This arrangement is typical in franchising, where the franchisor often takes steps to protect its brand and the financial health of its franchisees. By requiring the subfranchisee to reimburse these expenses, Anago maintains control over the protection of its security interest while ensuring that the financial burden ultimately falls on the subfranchisee whose business benefits from those protective measures. Prospective franchisees should understand that this clause could result in unexpected expenses if Anago needs to intervene to protect the subfranchisee's business assets or enforce its rights.