What rights does the Secured Party have upon Anago's default?
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.
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- 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.
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- In the event suit is brought to enforce or interpret any part of this Agreement, the prevailing party shall be entitled to recover, as an element of damages, its cost of suit and, not as damages, a reasonable attorneys' fee to be fixed by the Court.
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 several rights upon the Debtor's default. The Secured Party can start actions against third parties or defend actions that affect the parties' rights, including foreclosing on the security interest. In connection with such actions, the Debtor will cover all costs, expenses, and attorneys' fees incurred by the Secured Party.
Additionally, the Secured Party can request the appointment of a receiver to take possession of the collateral, regardless of whether the collateral is adequate to cover the debt. At any public sale, the Secured Party can bid for and purchase the collateral, holding the property free of redemption rights after the purchase.
Anago's FDD also states that the Secured Party can enforce any secured debt, obligation, or liability, even if those debts are also secured elsewhere. The Debtor's acceptance of the agreement does not affect the Secured Party's right to enforce other securities or exercise rights of set-off. If a suit is brought to enforce or interpret the agreement, the prevailing party can recover their costs and reasonable attorneys' fees.