What is the process for Aunt Millies Bakeries to obtain consent to transfer assets pledged as collateral?

According to Aunt Millies Bakeries' 2025 Franchise Disclosure Document, transferring assets pledged as collateral requires prior written consent from the Note Holder. Specifically, if a borrower intends to transfer any assets that have been pledged as collateral for a note, they must first obtain written permission from the entity holding the note.

This requirement is put in place to protect the interests of the Secured Party (the lender) by ensuring that the value of the collateral is not diminished without their knowledge or approval. The collateral serves as security for the loan, and any unauthorized transfer could impair the lender's ability to recover their investment if the borrower defaults.

For a prospective Aunt Millies Bakeries franchisee, this means that if they have financed any part of their business (such as equipment or distribution rights) and pledged assets as collateral, they cannot sell or transfer those assets without getting the lender's consent in writing. Failure to do so would constitute a default under the financing agreement, potentially leading to penalties or even foreclosure on the assets. Franchisees should carefully review their financing agreements and understand what assets are pledged as collateral and the process for obtaining consent before making any transfers.