Does the Benjamin Franklin Plumbing security agreement include proceeds from insurance covering the collateral?

According to Benjamin Franklin Plumbing's 2025 Franchise Disclosure Document, the security agreement does include proceeds from insurance covering the collateral. Specifically, the Debtor grants a security interest to the Secured Party in all replacements, rents, profits, substitutions and additions to the personal property used in connection with the Benjamin Franklin Plumbing franchise. This extends to any proceeds arising from the sale or disposition of these items.

Critically, this definition of 'proceeds' explicitly includes "sums payable for loss under insurance covering the Collateral." This means that if any of the secured property is damaged or destroyed and an insurance claim is paid out, those insurance funds are also considered collateral and are subject to the security interest held by Benjamin Franklin Franchising SPE LLC.

For a prospective Benjamin Franklin Plumbing franchisee, this has significant implications. It means that in the event of an insured loss, the insurance proceeds would not be freely available to the franchisee to reinvest in the business. Instead, those funds would be subject to the security interest, potentially requiring the franchisee to obtain permission from or negotiate with Benjamin Franklin Franchising SPE LLC regarding the use of those funds for repair or replacement of the collateral. This could impact the franchisee's ability to quickly recover from a loss and resume normal business operations.