Can the Secured Party appoint a receiver for the collateral under the Aunt Millies Bakeries agreement?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
- (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.
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to the 2025 Aunt Millies Bakeries FDD, the Secured Party has the right to appoint a receiver for the collateral under certain conditions. Specifically, upon any default by the Distributor, all obligations secured by the agreement become immediately due and payable. Following this, the Secured Party can appoint a receiver in writing for all or any part of the collateral. The Secured Party also has the power to remove or replace a receiver, or apply to a court for the appointment of a receiver.
The FDD states that any receiver appointed by the Secured Party will be considered the Distributor's agent for responsibility regarding their actions. The Secured Party can determine the receiver's pay, which the Distributor is responsible for covering. The Secured Party is not liable to the Distributor or any other person for appointing or not appointing a receiver, or for the receiver's actions or omissions.
The receiver, or the Secured Party, 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 the collateral under terms they deem appropriate. They can also enter any place of business without charge, excluding all other persons, including the Distributor. The Secured Party or receiver can use, collect, sell, lease, or otherwise deal with the collateral as they see fit.