What actions related to receivership, trusteeship, or custodianship would constitute a default by a Bath Tune Up Pledgor?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
(f) The Pledgor shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its assets, or the Pledgor shall make a general assignment for the benefit of its creditors; or
(i) there shall be commenced against the Pledgor any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unhanded for a period of thirty (30) days; or
(ii) there shall be commenced against the Pledgor any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distrait or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within thirty (30) days from the entry thereof; or
(iii) the Pledgor shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii) and (iii) above; or (v) the Pledgor shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, several actions related to receivership, trusteeship, or custodianship can constitute an event of default for a Pledgor. Specifically, if the Pledgor commences any case, proceeding, or other action seeking the appointment of a receiver, trustee, custodian, or other similar official for itself or for all or any substantial part of its assets, it would be considered an event of default. Similarly, the Pledgor making a general assignment for the benefit of its creditors also constitutes a default.
Furthermore, if a case, proceeding, or other action is commenced against the Pledgor seeking the appointment of a receiver, trustee, custodian, or similar official, and this results in the entry of an order for relief or any such appointment, it is an event of default. This also applies if such a case remains undismissed, undischarged, or unhanded for a period of thirty (30) days. Additionally, if a case is commenced against the Pledgor seeking the issuance of a warrant of attachment, execution, distrait, or similar process against all or any substantial part of its assets, and an order for such relief is entered and not vacated, discharged, stayed, or bonded pending appeal within thirty (30) days, it constitutes a default.
Finally, the Pledgor taking any action to further, consent to, approve, or acquiesce in any of the acts mentioned above also constitutes an event of default. These conditions are designed to protect the Secured Party's interests by ensuring that the Pledgor does not take actions that could jeopardize its assets or ability to meet its obligations. A prospective Bath Tune Up franchisee should understand these conditions, as they define specific scenarios that could trigger a default under the Pledgor agreement.