What is the name of the agreement that secures the obligations of the Borrower for the Aunt Millies Bakeries loan?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
FECTION 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 the 2025 Aunt Millies Bakeries FDD, the agreement that secures the obligations of the borrower is called the "Financing Security Agreement." This agreement outlines the terms and conditions under which the borrower grants a security interest to the secured party to ensure the repayment of the loan.
The Financing Security Agreement details the specific obligations of the borrower, including the payment of principal and interest on the promissory note, as well as adherence to all covenants and agreements outlined in the document. It also specifies the collateral that the borrower pledges as security, which may include rights under the Distributor's Agreement, equipment, inventory, accounts, and other assets related to the borrower's business.
Furthermore, the agreement outlines events that constitute a default by the borrower, such as failure to make payments, termination of the Distributor's Agreement, or failure to comply with the terms of the agreement. In the event of a default, the secured party has certain remedies available to protect its interests and recover the outstanding debt. Prospective Aunt Millies Bakeries franchisees should carefully review the terms of the Financing Security Agreement to understand their obligations and the potential consequences of default.