What can the Secured Party do to take possession of the Collateral for Epcon Communities?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
If an Event of Default shall have occurred and be continuing, the Secured Party, without any other notice to or demand upon the Debtor have in any jurisdiction in which enforcement hereof is sought, in addition to all other rights and remedies, the rights and remedies of a secured party under the Uniform Commercial Code of the State and any additional rights and remedies which may be provided to a secured party in any jurisdiction in which Collateral is located, including, without limitation, the right to take possession of the Collateral, and for that purpose the Secured Party may, so far as the Debtor can give authority therefor, enter upon any premises on which the Collateral may be situated and remove the same therefrom.
The Secured Party may in its discretion require the Debtor to assemble all or any part of the Collateral at such location or locations within the jurisdiction(s) of the Debtor's principal office(s) or at such other locations as the Secured Party may reasonably designate.
Unless the Collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, the Secured Party shall give to the Debtor at least ten business days prior written notice of the time and place of any public sale of Collateral or of the time after which any private sale or any other intended disposition is to be made.
The Debtor hereby acknowledges that ten business days prior written notice of such sale or sales shall be reasonable notice.
In addition, the Debtor waives any and all rights that it may have to a judicial hearing in advance of the enforcement of any of the Secured Party's rights and remedies hereunder, including, without limitation, its right following an Event of Default to take immediate possession of the Collateral and to exercise its rights and remedies with respect thereto.
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to the 2025 FDD, if an Event of Default occurs and is continuing, the Secured Party has specific rights and remedies regarding the Collateral. Epcon Communities, as the Secured Party, can exercise the rights and remedies of a secured party under the Uniform Commercial Code of the relevant state, as well as any additional rights and remedies provided in any jurisdiction where the Collateral is located.
Specifically, Epcon Communities has the right to take possession of the Collateral. To do so, they may enter any premises where the Collateral is located and remove it, provided the Debtor (the franchisee) has the authority to grant such access. Epcon Communities can also require the franchisee to assemble all or part of the Collateral at a location designated by Epcon Communities within the jurisdiction of the franchisee's principal office or another reasonably designated location.
Before selling the Collateral, Epcon Communities must provide the franchisee with at least ten business days' prior written notice of any public sale, or the date after which any private sale or other disposition is intended. The franchisee acknowledges that this ten-day notice is considered reasonable. Furthermore, the franchisee waives any rights to a judicial hearing before Epcon Communities enforces its rights and remedies, including taking immediate possession of the Collateral after an Event of Default.
This means that if a franchisee defaults on their obligations, Epcon Communities has broad authority to seize the assets used as Collateral. The franchisee gives up some legal protections, such as the right to a court hearing before the seizure. This arrangement is typical in secured lending, but franchisees should understand these conditions before agreeing to them.