Under what conditions can Burneys Sweets More accelerate the Indebtedness?
Burneys_Sweets_More Franchise · 2025 FDDAnswer from 2025 FDD Document
- (e) Pay All Sums Due.
Franchisee shall promptly pay all sums owed to Franchisor upon request.
Such sums shall include all damages, costs, losses, and expenses, including reasonable attorneys' fees, incurred by Franchisor as a result of the default and the termination.
Any outstanding obligations to Franchisor shall give rise to and remain, until paid in full, a lien in favor of Franchisor against any and all of the personal property, furnishings, equipment, signs, fixtures and inventory owned by Franchisee located on the Premises on the date this Agreement is terminated, expires, or does not renew.
Within fifteen (15) days of the date of expiration, termination, or non-renewal of this Agreement, Franchisee shall pay in full all of the creditors and suppliers to the Franchised Business.
- (f) Pay All Subsequent Amounts.
Franchisee shall promptly pay to Franchisor all damages, costs and expenses including reasonable attorneys' fees, incurred by Franchisor subsequent to the termination, expiration, or non-renewal of this Agreement in obtaining injunctive or other relief for the enforcement of any term, covenant or provision of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
Based on the 2025 Burneys Sweets More Franchise Disclosure Document, a franchisee is obligated to promptly pay all sums owed to the franchisor upon request. These sums encompass all damages, costs, losses, and expenses, including reasonable attorneys' fees, incurred by Burneys Sweets More as a result of the franchisee's default and the subsequent termination of the franchise agreement. This clause ensures that Burneys Sweets More can recover any financial losses resulting from a franchisee's failure to meet their contractual obligations.
Furthermore, any outstanding obligations to Burneys Sweets More will create a lien in favor of the franchisor against all personal property, furnishings, equipment, signs, fixtures, and inventory owned by the franchisee and located on the premises as of the termination date. This lien remains in effect until all debts are fully paid. This provision provides Burneys Sweets More with a security interest in the franchisee's assets, allowing them to seize and liquidate these assets to cover outstanding debts if necessary.
Additionally, within 15 days of the expiration, termination, or non-renewal of the agreement, the franchisee is required to fully pay all creditors and suppliers associated with the franchised business. The franchisee must also promptly pay Burneys Sweets More for all damages, costs, and expenses, including reasonable attorneys' fees, incurred by the franchisor after the termination, expiration, or non-renewal of the agreement in obtaining injunctive or other relief for the enforcement of any term, covenant, or provision of the agreement. These clauses ensure that Burneys Sweets More is protected from further financial losses and can take legal action to enforce the franchise agreement's terms.
In practical terms, this means a Burneys Sweets More franchisee must maintain diligent financial management and adhere strictly to the franchise agreement to avoid default. Failure to do so can result in accelerated debt obligations, potential liens on business assets, and liability for legal expenses incurred by the franchisor. Prospective franchisees should carefully review these financial obligations and ensure they have sufficient capital and resources to meet these requirements.