What happens to any excess proceeds after satisfying the Benjamin Franklin Plumbing debtor's obligations?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
The proceeds of sale or operation for Debtor's account shall be applied in total or partial satisfaction of Debtor's obligations to Secured Party and for Secured Party's costs incurred in proceeding under this paragraph.
All proceeds shall be applied first to cover Secured Party's costs, and second to satisfy Debtor's obligations to Secured Party.
To the extent there is still any deficiency in the amount Secured Party is owed, Secured Party may collect the same from Debtor, and, to the extent that any excess proceeds exist (after the application of such proceeds as provided for herein and under the law), Secured Party shall pay the same to Debtor.
Source: Item 22 — CONTRACTS (FDD pages 87–88)
What This Means (2025 FDD)
According to the 2025 Benjamin Franklin Plumbing Franchise Disclosure Document, in the event that the Secured Party (Benjamin Franklin Plumbing) sells or operates the business due to the Debtor's (franchisee) default, the proceeds from such sale or operation will be applied to cover the Secured Party's costs first. Then, the proceeds will be used to satisfy the Debtor's obligations to the Secured Party.
If, after covering the costs and satisfying the franchisee's obligations, there are any excess proceeds remaining, Benjamin Franklin Plumbing is obligated to pay those excess proceeds to the franchisee. However, if the proceeds are insufficient to cover the franchisee's obligations to Benjamin Franklin Plumbing, the franchisee remains liable for the deficiency.
This clause protects the franchisee by ensuring they receive any surplus funds generated from the sale or operation of their business after their debts to Benjamin Franklin Plumbing have been settled. It also clarifies that the franchisee is still responsible for any remaining debt if the sale or operation does not fully cover their obligations.