Does the Aunt Millies Bakeries agreement require acknowledgement of the sufficiency and receipt of the consideration?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
W I T N E S S E T H :
In consideration of the premises and agreements contained herein and other good and valuable consideration, the sufficiency and receipt of which is hereby acknowledged, the parties agree as follows:
- 1. GRANT OF SECURITY INTEREST: To secure the full and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of each of the Obligations (as hereafter defined), the Borrower hereby grants, conveys, assigns and transfers to Secured Party a security interest in and to the following personal property:
- a) any and all rights that the Borrower may have under the Distributor's Agreement between PERFECTION BAKERIES, INC., d/b/a AUNT MILLIE'S and Borrower;
- b) all equipment, inventory, accounts, goods, property, contract rights, chattel paper and general intangibles related to or arising from Borrower's business, whether now or hereafter existing or acquired and wherever located;
- c) any and all accessions, replacements and additions to or of the foregoing; and
- d) all cash or non-cash proceeds (including insurance proceeds) of the foregoing, the items described in a), b), c), and d) above being hereinafter collectively referred to as the "collateral".
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to Aunt Millies Bakeries' 2025 Franchise Disclosure Document, the security agreement requires acknowledgement of the sufficiency and receipt of consideration. Specifically, the document states that the parties acknowledge the sufficiency and receipt of the consideration within the context of the security agreement. This acknowledgement is part of the agreement's introductory section, preceding the specific terms related to the grant of a security interest.
This clause confirms that both Aunt Millies Bakeries and the distributor agree that they have received adequate value and consideration for entering into the security agreement. This acknowledgement is a standard legal practice to prevent future disputes over whether each party received something of value in exchange for their obligations under the agreement.
For a prospective Aunt Millies Bakeries distributor, this means that by signing the security agreement, they are confirming they understand and agree that they have received sufficient benefit from the agreement. This could include access to financing or other considerations outlined in the agreement. It is important for the distributor to fully understand what they are receiving and ensure it aligns with their expectations before signing the agreement.