In the event of a default by a Benjamin Franklin Plumbing debtor, what rights does the Secured Party have?
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.
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- Rights and Remedies.
In the event of a default hereunder, Secured Party shall have and shall otherwise be entitled to all rights and remedies provided for or allowed under law.
In accordance with the foregoing, and without limitation, Secured Party shall be entitled to:
- A.
Take possession of and protect the Collateral, including the right to remove all persons from the Premises and take sole possession thereof.
- B.
If Secured Party is not then in possession of the Collateral, to require Debtor or any other person in possession of the Collateral to assemble it at Debtor's expenses and make it available to Secured Party at a reasonably convenient place, to be designated by Secured Party.
- C.
Retain the Collateral in satisfaction of Debtor's obligations, or dispose of the Collateral by public or private sale (at which sale the Secured Party may be a buyer), or commence operation of the Business for Debtor's account.
Any sale or operation of the Business shall be deemed to be on Debtor's account unless Secured Party gives Debtor written notice of intent to retain the Collateral in satisfaction of Debtor's obligations.
Source: Item 22 — CONTRACTS (FDD pages 87–88)
What This Means (2025 FDD)
According to the 2025 Benjamin Franklin Plumbing Franchise Disclosure Document, several conditions can trigger a default by the debtor. These include failing to comply with the Franchise Agreement, the Security Agreement, or any other agreement with the Secured Party, defaulting on the Promissory Note, or experiencing loss, theft, or damage to the collateral. Insolvency, bankruptcy, or the appointment of a receiver also constitute default. Even if the Secured Party deems itself insecure and believes that the prospect of payment is impaired, it can declare a default.
Upon default, Benjamin Franklin Plumbing, as the Secured Party, has various rights and remedies available under the law. Specifically, it can take possession of and protect the collateral, including removing people from the premises. The Secured Party can require the debtor to assemble the collateral at a convenient location designated by the Secured Party.
Benjamin Franklin Plumbing can also retain the collateral to satisfy the debtor's obligations or dispose of it through public or private sale, even acting as a buyer in such a sale. Additionally, it can commence operation of the Benjamin Franklin Plumbing business for the debtor's account. Any sale or operation of the business is considered to be on the debtor's account unless the Secured Party provides written notice of intent to retain the collateral to satisfy the obligations.