Is a Deck Medic franchisee allowed to execute any other security agreement or financing statement covering the Collateral with any party other than the Secured Party?
Deck_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
This Security Agreement ("Security Agreement") is made as of [Date] between [Debtor Name] ("Debtor"), and Deck Medic, Inc. ("Secured Party").
For good and valuable consideration, the receipt and sufficiency of which are acknowledged, Debtor grants to Secured Party a security interest including inventory, accounts, supplies, contracts, and proceeds and products of all those assets and any and all amendments thereto to which Debtor and/or any Co-Debtors may be entitled pursuant to any Franchise Agreement entered into with Secured Party, together with all such rights and property hereafter acquired by Debtor and Co-Debtors; and all general intangibles (collectively, the "Collateral") as well as all parts, replacements, substitutions, profits, products and cash and non-cash proceeds of the foregoing Collateral (including insurance and condemnation proceeds payable by reason of condemnation of or loss or damage thereto). The Collateral described herein falls within the scope of the Uniform Commercial Code enacted in Illinois. The foregoing Collateral is granted to Secured Party as security for (i) the prompt payment of any promissory notes executed by Debtor in favor of Secured Party, and any renewals, compromises, extensions, modifications, accelerations or other changes in the time for performance or other terms (the "Notes"), and (ii) performance under any Franchise Agreements between Debtor and Secured Party, as the same may be amended (the "Franchise Agreements"), and (iii) all other agreements between Debtor and Secured Party.
Source: Item 23 — RECEIPTS (FDD pages 43–228)
What This Means (2024 FDD)
Based on the 2024 Deck Medic Franchise Disclosure Document, the franchisee (Debtor) is required to grant a security interest to Deck Medic, Inc. (Secured Party) on the Collateral. The Collateral includes inventory, accounts, supplies, contracts, and proceeds and products of all those assets and any and all amendments thereto to which Debtor and/or any Co-Debtors may be entitled pursuant to any Franchise Agreement entered into with Secured Party, together with all such rights and property hereafter acquired by Debtor and Co-Debtors; and all general intangibles as well as all parts, replacements, substitutions, profits, products and cash and non-cash proceeds of the foregoing Collateral (including insurance and condemnation proceeds payable by reason of condemnation of or loss or damage thereto).
This security interest serves as security for the prompt payment of any promissory notes executed by the franchisee in favor of Deck Medic, performance under any Franchise Agreements between the franchisee and Deck Medic, and all other agreements between the franchisee and Deck Medic. The Security Agreement itself does not explicitly state whether a Deck Medic franchisee is prohibited from entering into other security agreements with other parties regarding the same collateral.
Therefore, a prospective Deck Medic franchisee should seek clarification from Deck Medic regarding whether they are allowed to execute other security agreements or financing statements covering the Collateral with any party other than Deck Medic as the Secured Party. This information is crucial for understanding the franchisee's financial flexibility and obligations.