factual

What expenses can the Secured Party include when retaking and selling collateral related to a Buona franchise after an Event of Default?

Buona Franchise · 2025 FDD

Answer 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 can recover expenses related to retaking and selling the collateral. These expenses include the secured party's reasonable attorneys' fees and other legal expenses.

Specifically, the FDD states that upon an Event of Default, all amounts payable to the Secured Party become immediately due. The Secured Party has the rights and remedies of a secured party under the Uniform Commercial Code. This includes the right to enter the Buona Restaurant and remove collateral.

Buona is required to provide reasonable notice to the Debtor regarding the time and place of any sale or disposition of the collateral. The FDD specifies that reasonable notice is met if the Debtor receives notice at least five business days prior to the sale. The expenses of retaking, holding, preparing for sale, and selling the collateral can be recouped by the Secured Party, including attorney's fees and legal expenses.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.