What is the 'Collateral' defined as in the Benjamin Franklin Plumbing security agreement?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
As security for: (i) Debtor's timely and complete payment of all amounts owing under the Note, the Franchise Agreement, and of any other debts Debtor owes to Secured Party; and (ii) Debtor's performance of all of the covenants, obligations and agreements contained in the Note, the Franchise Agreement, this Agreement and all other instruments and documents pertaining to, evidencing or securing the Note, the Franchise Agreement or other debts Debtor owes to Secured Party (and as those instruments and documents may be amended from time to time), Debtor hereby grants, transfers, and assigns to Secured Party a continuing security interest in the following items, property and rights (collectively, "Collateral"): A.
All of the personal property of Debtor now and hereafter situated at, used in connection with, relating to or deriving from any BENJAMIN FRANKLIN PLUMBING Franchised Business (or its successor) pursuant to the Franchise Agreement or otherwise, including without limitation, at those certain premises which are described on Exhibit A, attached hereto and incorporated herein by this reference ("Premises"), and the businesses conducted at such Premises, including, without limitation, all present and after-acquired goods, accounts, documents, instruments, money, deposit accounts, chattel paper, inventory,
1 of all liens except the lien created hereby.
Debtor agrees that it: (a) will properly maintain, repair and
- Warranties; Protection of Collateral. Debtor warrants that it is the owner of the Collateral free
equipment, supporting obligations, investment property, letter of credit rights, and general intangibles; and
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
B. Debtor's entire right, title and interest in and to all replacements, rents, profits, substitutions
under insurance covering the Collateral).
Source: Item 22 — CONTRACTS (FDD pages 87–88)
What This Means (2025 FDD)
According to the 2025 Benjamin Franklin Plumbing Franchise Disclosure Document, the collateral in the security agreement encompasses a broad range of assets. It serves as security for the franchisee's obligations, including payments under the Promissory Note, the Franchise Agreement, and any other debts owed to Benjamin Franklin Plumbing. This collateral ensures that Benjamin Franklin Plumbing has a secured interest in the franchisee's assets, providing a means of recovery if the franchisee fails to meet their financial obligations.
The collateral includes all personal property of the franchisee located at, used in connection with, or deriving from the Benjamin Franklin Plumbing franchised business. This encompasses assets at the premises described in Exhibit A of the security agreement, which refers to the approved location address. The definition extends to all present and after-acquired goods, accounts, documents, instruments, money, deposit accounts, chattel paper, inventory, equipment, supporting obligations, investment property, letter of credit rights, and general intangibles. This means that any assets the franchisee acquires during the term of the agreement that fall into these categories are also subject to the security interest.
Furthermore, the collateral includes the franchisee's rights, title, and interest in all replacements, rents, profits, substitutions, and additions to the items mentioned above. It also covers any proceeds from the sale or disposition of these assets, including insurance payouts for losses covered by insurance. This comprehensive definition ensures that Benjamin Franklin Plumbing has a security interest in virtually all aspects of the franchisee's business assets, providing a strong position in case of default. The franchisee warrants that they own the collateral free of all liens except for the one created by the security agreement, and they are responsible for maintaining and repairing the collateral.