Under what circumstances does the attachment or seizure of a Coffee News franchisee's assets constitute a breach of the franchise agreement?
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)
Based on the 2025 Coffee News Franchise Disclosure Document, a franchisee's assets may be seized if they fail to meet the obligations of a Promissory Note.
Specifically, if a Coffee News franchisee enters into a Promissory Note and subsequently fails to pay interest, principal, or any other amount due according to the terms of the note, or if they breach any covenant, condition, or agreement within the note or any related instrument, and this failure remains uncured for more than five days (with no grace period for defaults under the note or the franchise agreement), it can trigger asset seizure. Additionally, the institution of bankruptcy, receivership, or insolvency proceedings by or against the franchisee, or the termination of the Coffee News Franchise Agreement for any reason, can also lead to the seizure of assets.
In such cases, the holder of the Promissory Note has the right to realize upon the security granted, including the power to sell the Coffee News franchise that was originally granted to the debtor. This means that a franchisee's failure to meet financial obligations or the termination of their franchise agreement can result in the loss of their franchise and related assets.