What is Anago Subfranchisor required to do to perfect the security interest granted to the Franchisor?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Subfranchisor will: (i) sign any financing statements or renewals, substitutions or corrections or other documents, or provide any document, and pay all connected costs necessary to perfect the security interest granted in this Section against the rights or interest of third parties and Subfranchisor appoints Franchisor its true and lawful attorney, and in its name, place and stead, to make, sign, acknowledge and file all documents, instruments and forms, whether notarized or otherwise, which in the opinion of Franchisor's counsel, are reasonably required to perfect the security interest granted in this Section; (ii) except in the ordinary course of business, not sell, transfer, assign, mortgage, encumber or otherwise dispose of, or create, assume, or suffer to exist any security interest (other than as created under this Agreement) in any of the Business Assets; and (iii) at all times keep accurate and complete records of the Business Assets at its place of business and Franchisor or any of its agents has the right to call at Subfranchisor's place of business at intervals to be determined by Franchisor, and, without hindrance or delay, to inspect the Business and to inspect, audit, check and make copies and extracts from the books, records, journals, orders, receipts, magnetic computer disks and records, correspondence and other date relating to the Business Assets including all Unit Franchise Agreements and promissory notes.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, as a Subfranchisor, you are required to take specific actions to ensure Anago's security interest in the business assets is perfected. This includes signing any necessary financing statements, renewals, substitutions, corrections, or other documents that Anago deems necessary to protect its interest against third parties. Additionally, you are responsible for covering all associated costs.
To further facilitate this process, the agreement includes a provision where you appoint Anago as your attorney to execute, sign, and file all documents required to perfect the security interest. This appointment is irrevocable and ensures that Anago can take necessary actions even if you are unable or unwilling to do so.
Furthermore, outside of normal business operations, you are prohibited from selling, transferring, assigning, mortgaging, or encumbering any of the business assets, or creating any additional security interests in them without Anago's consent. You must also maintain accurate and complete records of all business assets at your primary place of business, allowing Anago or its agents the right to inspect, audit, and copy these records at any time without hindrance.