What additional documents is Benjamin Franklin Plumbing required to execute to protect the Collateral?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
and interest in and to all replacements, rents, profits, substitutions and (or) additions to or of those items referred to in subparagraph 2.A. above, and any proceeds arising from the sale and(or) other disposition of the same (including, without limitation, sums payable for loss under insurance covering the Collateral).
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- Warranties; Protection of Collateral. Debtor warrants that it is the owner of the Collateral free of all liens except the lien created hereby. Debtor agrees that it: (a) will properly maintain, repair and
preserve the Collateral and insure the same against casualty loss by a policy of insurance covering such risks and in such amount as the Secured Party may require, with loss payable to Secured Party and will furnish certificates acceptable to Secured Party; (b) will pay in timely fashion all taxes which may become a lien on the Collateral; (c) except with Secured Party's prior written consent, Debtor will make no sale, contract to sell, lease, encumbrance or other disposition of the Collateral nor change its physical location from the Premises above designated; (d) will use the Collateral lawfully and only within insurance coverage and not use the Collateral so as to cause or result in any waste, unreasonable deterioration or depreciation; (e) will permit Secured Party to enter on Debtor's property and to inspect the Collateral at any reasonable time; (f) will not, with the exception of sales of inventory in the ordinary course of business, remove the Collateral from the Premises without the consent of Secured Party except when reasonably necessary for repair or to replace obsolete or worn out items of Collateral; and (g) will execute any additional agreements, assignments or documents that may be deemed necessary or advisable by Secured Party to effectuate the purpose of this Agreement and the protection of the Collateral.
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- Delivery and Perfection. Debtor agrees to execute and deliver to Secured Party any other documents reasonably requested by Secured Party to create, maintain, perfect, or assure the priority of the security interest granted above.
Source: Item 22 — CONTRACTS (FDD pages 87–88)
What This Means (2025 FDD)
According to the 2025 Benjamin Franklin Plumbing FDD, the franchisee, referred to as the Debtor, agrees to execute any additional agreements, assignments, or documents that Benjamin Franklin Plumbing, as the Secured Party, may deem necessary or advisable to effectuate the purpose of the security agreement and the protection of the collateral. The Debtor must also deliver any other documents reasonably requested by the Secured Party to create, maintain, perfect, or assure the priority of the security interest granted.
Furthermore, the Debtor appoints Benjamin Franklin Plumbing as its agent and attorney-in-fact to execute and deliver documents and to take all other actions (to the extent permitted by law) in the Debtor's name and on the Debtor's behalf that Benjamin Franklin Plumbing may deem necessary or advisable to create, maintain, perfect, assure the priority of, or foreclose its security interest in and lien on the collateral. This appointment is coupled with an interest and is irrevocable as long as any of the Indebtedness remains outstanding.
This means that Benjamin Franklin Plumbing has the power to request and execute documents on behalf of the franchisee to ensure their security interest in the collateral is protected and prioritized. This is a significant right granted to the franchisor and places a responsibility on the franchisee to understand the implications of these additional documents and actions that may be taken by Benjamin Franklin Plumbing to protect the collateral securing the franchisee's obligations.