What does the 'Indebtedness' secured by the Security Interest granted to Canopy Lawn Care include?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
l**." Franchisor's Security Interest may be subordinated to any financing related to Franchisee's operation of the Lawn Care Business, including, but not limited to, a real property mortgage and Vehicle leases.
- 18.2 The Security Interest in the Collateral is to secure payment of the following (the "Indebtedness"):
- (a) All amounts due to Franchisor and its affiliates under this Agreement or otherwise by Franchisee;
- (b) All sums which Franchisor may, at its option, expend or advance for the maintenance, preservation, and protection of the Collateral, including, without limitation, payment of rent, taxes, levies, assessments, insurance premiums, and discharge of liens, together with interest, or any other property given as security for payment of the Indebtedness;
- (c) All expenses, including reasonable attorneys' fees, which Franchisor incurs in connection with collecting any or all Indebtedness secured hereby or in enforcing or protecting Franchisor's rights under the Security Interest and this Agreement;
Source: Item 22 — CONTRACTS (FDD page 55)
What This Means (2025 FDD)
According to Canopy Lawn Care's 2025 Franchise Disclosure Document, the security interest granted to the franchisor covers the franchisee's vehicles, accounts, credit card receivables, cash, equipment, and franchise rights related to the lawn care business. This security interest ensures the payment of what the FDD refers to as 'Indebtedness'.
The 'Indebtedness' includes all amounts owed by the franchisee to Canopy Lawn Care and its affiliates under the Franchise Agreement or any other agreement. It also covers any sums that Canopy Lawn Care may spend to maintain, preserve, and protect the collateral, such as payments for rent, taxes, insurance, and the discharge of liens. These expenses also accrue interest.
Furthermore, the 'Indebtedness' encompasses all expenses, including reasonable attorney's fees, that Canopy Lawn Care incurs while collecting any amounts owed or enforcing its rights under the security interest and the Franchise Agreement. Finally, it includes all other present or future liabilities and obligations of the franchisee to Canopy Lawn Care or third parties, whether direct or indirect, absolute or contingent, including any renewals or extensions of the Franchise Agreement.