Is a Security Agreement part of the Deck Medic franchise contracts?
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 22 — CONTRACTS (FDD pages 42–43)
What This Means (2024 FDD)
According to Deck Medic's 2024 Franchise Disclosure Document, a Security Agreement is part of the franchise agreement. Exhibit 7 of the Franchise Agreement is a Security Agreement between the Debtor (franchisee) and the Secured Party (Deck Medic, Inc.).
The Security Agreement grants Deck Medic a security interest in the franchisee's assets. This includes inventory, accounts, supplies, contracts, and proceeds from the Franchise Agreement. It also covers any rights or property acquired by the franchisee, general intangibles, parts, replacements, profits, products, and cash or non-cash proceeds from the collateral. The collateral falls under the scope of the Uniform Commercial Code in Illinois.
The purpose of the collateral is to secure the franchisee's obligations. These obligations include the payment of promissory notes to Deck Medic, performance under the Franchise Agreements, and all other agreements between the franchisee and Deck Medic. This means that if a franchisee defaults on their financial or contractual obligations, Deck Medic has a legal claim to the assets listed as collateral in the Security Agreement.