What is the Borrower's obligation regarding financing statements related to Aunt Millies Bakeries?

According to Aunt Millies Bakeries' 2025 Franchise Disclosure Document, the borrower is obligated to execute all proper financing statements for filing. This requirement is part of the Borrower Covenants within the Financing Security Agreement. The security interest granted covers rights under the Distributor's Agreement with Perfection Bakeries, equipment, inventory, accounts, contract rights, and proceeds related to the borrower's business. This collateral secures the borrower's obligations, including the principal and interest on the promissory note and all other debts and agreements outlined in the Financing Security Agreement.

In practical terms, this means that as an Aunt Millies Bakeries distributor, you must sign all necessary documents to formally establish the lender's security interest in your business assets. These financing statements are typically filed with state or local authorities to provide public notice of the lender's claim on your assets. This allows the lender to have a priority claim on the specified collateral in the event of default.

Failure to comply with this covenant can result in a default under the Financing Security Agreement, potentially leading to acceleration of the debt and loss of the collateral. It is important for prospective franchisees to understand the implications of granting a security interest and to ensure they can meet all obligations under the financing agreement. Franchisees should consult with legal and financial advisors to fully understand these obligations.