What is the required statement made by the Debtor in the Coffee News Debtor acknowledgement?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
. In no event shall any monies _, 20, which is called the "maturity date." by time without penalty. | | month until he/she have paid all of the | | | described above that he/she may owe ur | |
The Debtor acknowledges and hereby agrees to grant Holder, with any and all the licensed rights to the territory that was granted to Debtor in the foregoing Coffee News Franchise Agreement, to secure the payment set forth in this Promissory Note and to secure the performance of all covenants and agreements contained herein. In the event of a failure to pay interest, principal or any other amount due on this Promissory Note in accordance with its terms, or of a breach of any other covenant, condition or agreement contained herein, remaining uncured for a period in excess of five (5) days (except that no grace period shall be permitted for a default under this Note or the foregoing Coffee News Franchise Agreement), or any breach in the covenants, conditions or agreements in any instrument given in connection with the Promissory Note and debt secured hereby, or if a proceeding in bankruptcy, receivership or insolvency shall be instituted by or against the undersigned, or if the foregoing Coffee News Franchise Agreement for which the parties have entered into this Promissory Note is terminated for any reason, then the entire debt secured hereby, together with all charges to which Holder would be entitled under the Promissory Note or by law if the Promissory Note were prepaid in full, shall be due and payable, Holder shall have the right to realize upon the security granted herein, and the payment and acceptance of any sum on account of this note shall not be considered a waiver of such right of election. The failure at any time of Holder to exercise this option shall not constitute a waiver of
the right to exercise the right at any other time.
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
According to the 2025 Coffee News Franchise Disclosure Document, the Debtor must acknowledge and agree to grant the Holder (Coffee News USA, Inc.) any and all licensed rights to the territory that was granted to the Debtor in the Coffee News Franchise Agreement. This secures the payment outlined in the Promissory Note and ensures compliance with all agreements within.
This acknowledgement means that if a Coffee News franchisee (the Debtor) takes out a loan (Promissory Note) to finance their franchise, they are granting Coffee News USA, Inc. (the Holder) a security interest in their franchise territory. This allows Coffee News to reclaim the territory if the franchisee defaults on the loan or violates the franchise agreement. The Debtor also acknowledges that the Holder has the right to sell the franchise if the security is realized.
Specifically, if the Debtor fails to pay interest, principal, or any other amount due on the Promissory Note, or breaches any agreement, and it remains uncured for more than five days, the entire debt becomes immediately due. This also applies if bankruptcy, receivership, or insolvency proceedings are initiated by or against the Debtor, or if the Coffee News Franchise Agreement is terminated for any reason. The Holder can then realize the security granted and sell the franchise.
This clause protects Coffee News by allowing them to recover the franchise if the franchisee is unable to meet their financial obligations. Prospective franchisees should understand that taking out a loan to finance their Coffee News franchise involves granting Coffee News a significant security interest in their business.