What actions can the Secured Party or a receiver take regarding the Aunt Millies Bakeries Collateral?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
4. REMEDIES:
- (a) Upon any default of Distributor, all the obligations secured by this Agreement shall immediately become due and payable in full without notice or demand and the Secured Party shall have and may exercise all the rights, remedies and privileges as are accorded to a secured party by the applicable laws of the State of Indiana in effect as of the date of this Agreement.
- (b) Secured Party may by instrument in writing appoint any person as a receiver of all or any part of the Collateral. Secured Party may from time to time remove or replace a receiver, or make application to any court of competent jurisdiction for the appointment of a receiver. Any receiver appointed by Secured Party will (for purposes relating to responsibility for the receiver's acts or omissions) be considered to be the Distributor's agent. Secured Party may from time to time fix the receiver's remuneration and the Distributor will pay Secured Party the amount of such remuneration. Secured Party will not be liable to the Distributor or any other person
in connection with appointing or not appointing a receiver or in connection with the receiver's actions or omissions.
- (c) Secured Party or a receiver may take possession of all or any part of the Collateral and retain it for as long as Secured Party or the receiver considers appropriate, receive any rents and profits from the Collateral, carry on (or concur in carrying on) all or any part of the Distributor's business or refrain from doing so, borrow on the security of the Collateral, repair the Collateral, process the Collateral, prepare the Collateral for sale, lease or other disposition, and sell or lease (or concur in selling or leasing) or otherwise dispose of the Collateral on such terms and conditions (including among other things by arrangement providing for deferred payment) as Secured Party or the receiver considers appropriate.
Secured Party or the receiver may (without charge and to the exclusion of all other persons including the Distributor) enter upon any place of business.
- (d) Secured Party or a receiver may use, collect, sell, lease or otherwise dispose of, realize upon, release to the Distributor or other persons and otherwise deal with, the Collateral in such manner, upon such terms (including among other things by arrangement providing for deferred payment) and at such times as Secured Party or the receiver considers appropriate.
Secured Party or the receiver may make any sale, lease or other disposition of the Collateral in the name of and on behalf of the Distributor or otherwise.
- (e) All proceeds of Collateral received by Secured Party or a receiver may be applied to discharge or satisfy any expenses (including among other things the receiver's remuneration and other expense of enforcing Secured Party's rights under this Agreement), charges, borrowing (including the Lender Loan if any), taxes and other expenses affecting the Collateral or which are considered advisable by Secured Party or the receiver to preserve, repair, process, maintain or enhance the Collateral or prepare it for sale, lease or other disposition, or to keep in good standing any charges on the Collateral ranking in priority to any charge created by this Agreement, or to sell, lease or otherwise dispose of the Collateral, all as may be determined by Secured Party in its sole discretion.
The balance of such proceeds will be applied to the liabilities in such manner and at such time as Secured Party considers appropriate and thereafter will be accounted for as required by law.
- (f) Before and after default, Secured Party will have, in addition to the rights specifically provided in this Agreement, the rights of a secured party under the Indiana Uniform Commercial Code, as well as the rights recognized at law and in equity.
No right will be exclusive of or dependent upon or merge in any other right, and one or more of such rights may be exercised independently or in combination from time to time.
(g) The Distributor will remain liable to Secured Party for payment of any liabilities that are outstanding following realization of all or any part of the Collateral.
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to Aunt Millies Bakeries's 2025 Franchise Disclosure Document, upon a distributor's default, the secured party has extensive rights regarding the collateral. The secured party can immediately demand that all obligations be paid in full without notice. They can exercise all rights, remedies, and privileges available to a secured party under Indiana law.
The secured party can appoint a receiver to manage the collateral, and this receiver is considered the distributor's agent. The secured party isn't liable for the receiver's actions. The secured party or receiver can take possession of the collateral, collect rents and profits, continue or discontinue the distributor's business, borrow against the collateral, repair it, prepare it for sale or lease, and sell or lease it under terms they deem appropriate. They can also enter the distributor's place of business without charge.
Furthermore, the secured party or receiver can use, collect, sell, lease, or otherwise dispose of the collateral as they see fit. Proceeds from the collateral can be used to cover expenses, including the receiver's remuneration, enforcement costs, taxes, and costs to maintain or prepare the collateral for sale. The remaining proceeds will be applied to the distributor's liabilities as the secured party deems appropriate, with any balance accounted for as required by law. The distributor remains liable for any outstanding liabilities even after the collateral is realized.