What agreement secures the obligations of the borrower under the Aunt Millies Bakeries financing?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
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Exhibit J(2) Financing Documents with Distribution Services of America, Inc. Financing Security Agreement
THIS AGREEMENT, made effective ___________, 20___, by and between Distribution Services of America, Inc., a Florida corporation with offices at 2900 Westchester Avenue, Purchase, New York (herein called the "Secured Party") and DISTRIBUTOR'S CORPORATE NAME, residing at DISTRIBUTOR'S ADDRESS, (herein called the "Borrower").
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,
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to Aunt Millies Bakeries' 2025 Franchise Disclosure Document, the obligations of the borrower are secured by a security interest granted to the secured party. This security interest covers various assets and rights, ensuring the lender has a claim on these assets if the borrower fails to meet their obligations.
The security interest applies to any rights the borrower has under the Distributor's Agreement with Perfection Bakeries, Inc., doing business as Aunt Millie's. It also includes all equipment, inventory, accounts, goods, property, contract rights, chattel paper, and general intangibles related to the borrower's business, whether these exist now or are acquired in the future, regardless of their location. The security interest extends to any additions, replacements, and accessions to these items, as well as all cash and non-cash proceeds, including insurance proceeds, derived from them.
The obligations secured by this agreement include the outstanding principal and interest on the Promissory Note, which is in the original principal amount of a specified loan amount in dollars. It also covers all debts, liabilities, obligations, covenants, and agreements of the borrower as outlined in the Financing Security Agreement. This comprehensive security interest ensures that the lender has a broad claim against the borrower's assets in case of default, providing a strong incentive for the borrower to fulfill their financial commitments.