Does Card My Yard have a lien against a franchisee's assets for unpaid obligations after termination?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
- (5) Promptly pay all sums owing to us and our Affiliates, and all damages, costs and expenses, including reasonable attorneys' fees and costs, incurred by us as a result of any default by you or in connection with obtaining injunctive or other relief for the enforcement of any provisions of this Article XIX., which obligation shall give rise to and remain a lien in favor of us against any and all of your assets, until such obligations are paid in full.
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, Card My Yard is granted a lien against a franchisee's assets for unpaid obligations. Specifically, if a franchisee defaults, they are responsible for promptly paying all sums owed to Card My Yard and its affiliates, including damages, costs, expenses, and reasonable attorney's fees.
This obligation creates a lien in favor of Card My Yard against any and all of the franchisee's assets until all outstanding obligations are fully paid. This means that Card My Yard has a legal claim on the franchisee's assets, which can be used to satisfy the debt.
This is a significant consideration for potential franchisees as it means Card My Yard can pursue the franchisee's assets to recover any outstanding debts. Franchisees should ensure they understand their obligations and the potential consequences of default, including the possibility of a lien being placed on their assets. It is advisable to seek legal counsel to fully understand the implications of this clause.