What assets of the Devon Creek franchisee are subject to the lien for unpaid sums after termination?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
- 18.1.4 promptly pay all sums owing to Franchisor and its affiliates. Such sums shall include all damages, costs and expenses, including reasonable attorneys' fees, incurred by Franchisor as a result of any default by Franchisee. The payment obligation herein shall give rise to and remain, until paid in full, a lien in favor of Franchisor against any and all of the personal property, furnishings, equipment,
- fixtures, and inventory or other business assets owned by Franchisee at the time of default;
Source: Item 22 — CONTRACTS (FDD page 45)
What This Means (2024 FDD)
According to Devon Creek's 2024 Franchise Disclosure Document, if a franchisee owes money to Devon Creek or its affiliates upon termination, Devon Creek will have a lien against the franchisee's business assets. This lien ensures that Devon Creek has a legal claim on specific assets to recover the unpaid amounts.
The assets subject to this lien include all personal property, furnishings, equipment, fixtures, and inventory or other business assets owned by the franchisee at the time of default. This means that Devon Creek can claim these items to cover outstanding debts, including damages, costs, expenses, and reasonable attorney's fees incurred due to the franchisee's default.
This provision is significant for potential Devon Creek franchisees because it highlights the importance of meeting all financial obligations to the franchisor. Failure to do so can result in Devon Creek seizing business assets to settle debts. Franchisees should carefully manage their finances and ensure compliance with the franchise agreement to avoid potential default and the subsequent loss of business assets.