Under the Benjamin Franklin Plumbing security agreement, what is the 'Indebtedness' referring to?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
| ("Debtor"), and Benjamin Franklin Franchising SPE LLC, a Delaware limited liability company ("Secured | Party"), who agree as follows: | | | | | | | | | |
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- Recitals. This Agreement is made and entered into with reference to the following facts and circumstances:
- A. Debtor and Secured Party entered into a BENJAMIN FRANKLIN PLUMBING franchise agreement ("Franchise Agreement") under which Debtor was required to pay Secured Party a Franchise Fee;
- B. Debtor and Secured Party entered into a Promissory Note ("Note") on the same date as this Security Agreement ("Agreement") under which Secured Party agreed to permit Debtor to pay the Franchise Fee on a payment plan;
- C. Debtor is
Source: Item 22 — CONTRACTS (FDD pages 87–88)
What This Means (2025 FDD)
According to the 2025 Benjamin Franklin Plumbing Franchise Disclosure Document, the term 'Indebtedness' within the security agreement refers to the principal amount the franchisee owes to Benjamin Franklin Franchising SPE LLC, as evidenced by a Promissory Note. Specifically, the franchisee (referred to as 'Debtor') is jointly and severally indebted to the franchisor ('Secured Party') for this principal amount. The Promissory Note outlines the payment plan agreed upon, allowing the franchisee to pay the Franchise Fee over time.
As a condition for Benjamin Franklin Plumbing accepting the Promissory Note, the franchisee agrees to secure their performance under the Note, the Franchise Agreement, and any other debts owed to the franchisor. This security is provided by granting the franchisor a security interest in the collateral described in the security agreement. This collateral may include personal property used in the Benjamin Franklin Plumbing franchised business.
In essence, the 'Indebtedness' represents the franchisee's financial obligation to Benjamin Franklin Plumbing, particularly the amount financed through the Promissory Note for the Franchise Fee. The security agreement ensures that Benjamin Franklin Plumbing has a secured interest in the franchisee's assets, protecting the franchisor in case the franchisee defaults on their payment obligations.