What is the role of the 'Holder' in the context of the promissory note for a Benjamin Franklin Plumbing franchise?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
In consideration of the willingness of Benjamin Franklin Franchising SPE LLC ("Holder") to permit ("Maker") to pay a portion of the Franchise Fee owed to Holder in connection with a BENJAMIN FRANKLIN PLUMBING Franchise Agreement and pursuant to the foregoing Promissory Note ("Note"), the undersigned ("Guarantors"), hereby personally and unconditionally: (1) guarantee to Holder and its successors and assigns that Maker shall punctually pay and perform each and every undertaking set forth in the Note; and (2) agree personally to be liable for Maker's Default under the Note.
Source: Item 22 — CONTRACTS (FDD pages 87–88)
What This Means (2025 FDD)
According to the 2025 FDD, the 'Holder' in the context of the promissory note for a Benjamin Franklin Plumbing franchise refers to Benjamin Franklin Franchising SPE LLC. The Holder is the entity to whom the Maker (the franchisee) owes the franchise fee and to whom the Promissory Note is made. The Holder is essentially the lender or creditor in this financial arrangement, agreeing to allow the franchisee to pay the franchise fee over time rather than in one lump sum.
The Guarantors, who are essentially co-signers of the promissory note, guarantee to the Holder that the Maker will fulfill all obligations outlined in the note, including timely payments. The Guarantors also agree to be personally liable if the Maker defaults on the note. This arrangement provides the Holder with additional security, ensuring that the debt is more likely to be repaid, even if the original franchisee fails to meet their financial obligations.
To further protect its interests, Benjamin Franklin Franchising SPE LLC, as the Holder, requires the Debtor (franchisee) to grant a security interest in various assets. This means the Holder has a claim on the franchisee's business assets, including personal property, equipment, accounts, and inventory, as collateral for the debt. This security interest allows the Holder to seize and sell these assets to recover the outstanding debt if the franchisee defaults on the promissory note, providing an additional layer of financial protection for Benjamin Franklin Plumbing.