Can the Secured Party enter Anago's premises to take possession of the Collateral upon 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
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, if a franchisee (Debtor) defaults on their agreement, the secured party has the option to enter the premises where the collateral is located and take possession of it. This can be done without prior notice to the franchisee. The secured party can remove the collateral as part of this process.
This agreement defines the Debtor's "Business Assets" as collateral, including accounts receivable, business records, equipment, furniture, fixtures, contracts, and intangible rights related to the Anago subfranchise business. This collateral secures the franchisee's obligations under the Subfranchise Rights Agreement (SRA) and any amounts advanced by the secured party for maintaining the collateral.
This clause is significant for a prospective Anago franchisee because it outlines the potential consequences of defaulting on their obligations. Anago can take direct control of the business assets used to operate the franchise. It is important for franchisees to understand what constitutes a default and the conditions under which Anago can seize assets. Franchisees should seek legal counsel to fully understand the implications of this clause and to ensure they can meet their obligations under the agreement.