What expenses can the Secured Party include when retaking, holding, preparing for sale, or selling the collateral of a Buona franchise after default?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3.2. Remedies. Upon the occurrence of an Event of Default, all amounts payable to Secured Party shall become immediately due and payable and Secured Party shall have all the rights and remedies of a secured party under the Uniform Commercial Code as in effect in the state or states in which the Collateral may be located, including, but not limited to, the right to enter upon the Buona Restaurant peaceably and remove all Collateral. Secured Party shall give Debtor reasonable notice of the time and place of any public or private sale or other intended disposition of all or any particular Collateral, as the case may be. Debtor agrees that the requirement of reasonable notice shall be met if notice is mailed to Debtor at its address first above written not less than five (5) business days prior to the sale or other disposition. Expenses of retaking, holding, preparing for sale, selling or the like, shall include, without limitation, Secured Party's reasonable attorneys' fees and other legal expenses. Secured Party's rights and remedies, whether pursuant hereto or pursuant to the Illinois Uniform Commercial Code or any other statute or rule of law conferring rights similar to those conferred by the Illinois Uniform Commercial Code, shall be cumulative and not alternative.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, in the event of a default, the secured party (Buona) has specific rights regarding the collateral. If a franchisee defaults on their agreement, Buona can recover all amounts owed immediately. Buona also has the right to enter the restaurant and remove the collateral.
Buona must provide the franchisee with reasonable notice of any public or private sale or disposition of the collateral. The franchise agreement specifies that at least five business days' notice sent to the franchisee's address is considered reasonable.
Furthermore, the expenses Buona incurs while retaking, holding, preparing for sale, or selling the collateral can be charged to the franchisee. These expenses specifically include Buona's reasonable attorneys' fees and other legal expenses. The agreement emphasizes that these rights and remedies are cumulative and do not limit any other rights Buona may have under the Illinois Uniform Commercial Code or other applicable laws.