Does the Deck Medic Security Agreement benefit the successors in interest of the parties involved?
Deck_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchise Agreement Exhibit 7 Security Agreement
SECURITY AGREEMENT
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 provided excerpts do not explicitly state whether the Security Agreement benefits the successors in interest of either party. The Security Agreement itself, as described in Exhibit 7, is between the Debtor (franchisee) and Deck Medic, Inc. (Secured Party), granting a security interest to Deck Medic in the Debtor's assets.
However, the excerpts do discuss transferability of the franchise agreement in the event of death or disability of the franchisee. Specifically, in the event of death, the agreement may be transferred to a designated person, heir, or beneficiary without a transfer fee, subject to certain conditions. These conditions include the transferee agreeing to be bound by the agreement's terms, personally guaranteeing the franchisee's obligations, and executing the Franchise Owner and Spouse Agreement and Guaranty.
While the excerpts outline conditions for transferring the franchise agreement, they do not clarify whether the Security Agreement's terms extend to or benefit successors in interest. A prospective franchisee should seek clarification from Deck Medic regarding the specific terms of the Security Agreement and its implications for successors or assignees.