Can Precision Door Service apply payments from a franchisee to any past due indebtedness?
Precision_Door_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
in collecting that delinquent installment. DEBTOR is not hereby authorized to be delinquent in paying any installment. Any demand for a late charge shall not affect any other remedies available.
If any draft or check is returned by DEBTOR'S financial institution for insufficient funds or any other reason, SECURED PARTY is entitled to reimbursement from DEBTOR in the amount of TWENTY FIVE AND 00/100 DOLLARS ($25.00) per draft or check. Any demand for reimbursement shall not in any manner affect any other remedies available.
COLLATERAL:
All right, title and interest of DEBTOR to all fixtures, furniture, leasehold improvements, furnishings, materials, supplies, equipment, goods, machinery, general intangibles, money, accounts, inventory, chattel paper, documents, instruments, commercial tort claims, deposit accounts, investment property, letter-of-credit rights, letters of credit and other personal property of any kind whatsoever, whether now or hereafter existing, arising, acquired or used by DEBTOR in any manner in connection with the PRECISION GARAGE DOOR SERVICE® franchise operated by DEBTOR under the Franchise Agreement or any other business which has provided or is providing services related to the sale, service, installation and repair of garage doors for customers; and all replacements, betterments, substitutions, renewals, additions, products and proceeds thereto or therefrom.
GRANT OF SECURITY INTEREST:
DEBTOR grants SECURED PARTY a security interest in the COLLATERAL to secure the payment of all indebtedness owed and the performance of all obligations performable by DEBTOR to or for SECURED PARTY (including, without limitation, all indebtedness and obligations under this document or any document collateral to it).
SECURED PARTY's sole duty with respect to the custody, safekeeping and physical preservation of COLLATERAL in its possession or under its control will be to use reasonable care in the custody and preservation of such COLLATERAL.
Source: Item 22 — Contracts (FDD pages 91–92)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Precision Door Service secures the franchisee's obligations through a security interest in the franchisee's assets. This means that the franchisor has a claim on the franchisee's business assets to ensure payment of debts and performance of obligations. The agreement specifies that the franchisee grants Precision Door Service a security interest in all assets related to the Precision Garage Door Service franchise. This collateral covers a wide range of items, including fixtures, furniture, equipment, inventory, accounts, and other personal property used in connection with the franchise.
The security interest granted to Precision Door Service ensures that the franchisor has a legal right to seize and liquidate these assets if the franchisee fails to meet their financial obligations or otherwise breaches the franchise agreement. This protects Precision Door Service in case of franchisee default.
If a franchisee is late on an installment payment, they will be charged a late fee of $10 per day. Additionally, if a check or draft is returned due to insufficient funds, the franchisee will be charged $25 per returned check or draft. These charges are in addition to any other remedies available to Precision Door Service, indicating the franchisor's intent to pursue all available options to recover outstanding debts.