To whom must a Devon Creek franchisee promptly pay all sums owing 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, upon termination of the franchise agreement, a franchisee must promptly pay all sums owing to Devon Creek and its affiliates. These sums include any damages, costs, and expenses, including reasonable attorneys' fees, that Devon Creek incurs as a result of any default by the franchisee.
This obligation creates a lien in favor of Devon Creek against the franchisee's personal property, furnishings, equipment, fixtures, inventory, and other business assets owned by the franchisee at the time of default. This means that Devon Creek has a legal claim on these assets to cover any outstanding debts.
This requirement is standard in franchising, ensuring that the franchisor is compensated for any losses or expenses resulting from the franchisee's actions or failure to meet their contractual obligations. Prospective franchisees should understand that termination does not absolve them of financial responsibilities and that Devon Creek has the right to pursue legal and financial remedies to recover any outstanding amounts.