What constitutes a default by a Benjamin Franklin Plumbing debtor regarding the Note or Indebtedness?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
The following shall constitute a default by Debtor hereunder:
A. Any failure to comply with the provisions of the Franchise Agreement, this Agreement, or any other agreement with Secured Party, or to perform any covenant contained herein.
B. Any default by Debtor under the Note or any failure to pay when due any portion of the Indebtedness, including, without limitation, any interest payable thereunder.
C. Any loss, theft, substantial damage or destruction of the Collateral or issuance of attachment, levy, garnishment or judicial process with respect to the Collateral.
D. Insolvency, bankruptcy, business failure, assignment for benefit of creditors or appointment of a receiver for Debtor or its property.
E. Secured Party deeming itself insecure, believing in good faith that the prospect of payment of the Indebtedness (or any portion thereof) or of performance of this Agreement, or any covenant contained herein, is impaired.
Source: Item 22 — CONTRACTS (FDD pages 87–88)
What This Means (2025 FDD)
According to Benjamin Franklin Plumbing's 2025 Franchise Disclosure Document, several actions can trigger a default by the debtor. These include failing to comply with the provisions outlined in the Franchise Agreement, the Security Agreement, or any other agreement with the Secured Party, as well as failing to perform any covenant contained within these agreements. Additionally, any default by the debtor under the Promissory Note or failure to pay any portion of the Indebtedness when due, including interest, will also constitute a default.
Further conditions that can lead to default involve the loss, theft, substantial damage, or destruction of the collateral used to secure the debt. The issuance of any attachment, levy, garnishment, or judicial process against this collateral also triggers a default. Moreover, if the debtor becomes insolvent, declares bankruptcy, experiences business failure, assigns assets for the benefit of creditors, or has a receiver appointed for their property, it will be considered a default.
Finally, Benjamin Franklin Plumbing has the right to deem itself insecure if it believes, in good faith, that the prospect of payment of the Indebtedness or performance of the agreement is impaired. This clause provides Benjamin Franklin Plumbing with broad discretion to declare a default based on its assessment of the franchisee's financial stability and ability to meet their obligations. Understanding these conditions is crucial for a prospective franchisee to avoid potential defaults and maintain a healthy business relationship with Benjamin Franklin Plumbing.