Does the Aunt Millies Bakeries agreement require the borrower to execute financing statements?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3. BORROWER COVENANTS: Borrower covenants and agrees as follows**:**
- a) to execute all proper financing statements for filing.
- b) to pay and perform all of the Obligations secured by this Agreement according to its terms;
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to the 2025 Aunt Millies Bakeries FDD, the borrower is required to execute all proper financing statements for filing. This requirement is part of the Borrower Covenants within the Financing Security Agreement.
In practical terms, this means that as part of securing financing, an Aunt Millies Bakeries distributor must sign documents that allow the lender to register a security interest in the distributor's assets. These assets, referred to as collateral, include rights under the Distributor's Agreement, equipment, inventory, accounts, contract rights, and any proceeds from these items. The financing statements provide public notice of the lender's claim on these assets.
This is a standard practice in secured lending. By filing financing statements, the lender establishes priority over other potential creditors in the event that the distributor defaults on their obligations. The distributor's failure to execute these statements would constitute a breach of the Financing Security Agreement, potentially leading to default and the exercise of remedies by the lender.