Does Aunt Millies Bakeries require franchisees to sign a Security Agreement?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
ement | | | Exhibit H | - | (1) | Aunt Millie’s Bakeries Security Agreement |
Exhibit M
Perfection Bakeries, Inc. ADDENDUM TO THE FRANCHISE DISCLOSURE DOCUMENT And Agreements with Franchisor
FOR THE STATE OF ILLINOIS
Items 5, 7 and 17 of the Franchise Disclosure Document, and all Agreements between Distributor and Perfection Bakeries, Inc. ("PERFECTION BAKERIES"), Franchisor, including the Distribution Agreement, Advertising Agreement, Buy Back Agreement, Computer Equipment Lease Agreement, and Security Agreement (collectively "PERFECTION BAKERIES Agreements") attached as Exhibits C, E, F, G, and H to the Franchise Disclosure Document, are amended as follows:
- The following is added:
Notwithstanding anything to the contrary contained in the Franchise Disclosure Document and the Agreements, all initial fees are deferred and not payable to Franchisor until Franchisor's initial obligations to the Franchisee have been completed and the Franchisee has commenced business under the Distribution Agreement. The Illinois Attorney General's Office imposed this deferral requirement due to the Franchisor's financial condition.
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- Franchisees' rights upon Termination and Non-Renewal are set forth in sections 19 and 20 of the Illinois Disclosure Act.
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Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Aunt Millies Bakeries's 2025 Franchise Disclosure Document, a Security Agreement is part of the standard agreements that franchisees must sign. Exhibit M of the FDD outlines addenda to various agreements for Illinois franchisees, including amendments to agreements with Perfection Bakeries, Inc. These agreements include the Distribution Agreement, Advertising Agreement, Buy Back Agreement, Computer Equipment Lease Agreement, and Security Agreement. This indicates that a Security Agreement is a standard document in the franchising process.
Furthermore, the FDD mentions agreements with First Capital Acceptance Corp. that also include a Financing Security Agreement. Similarly, agreements with Distribution Services of America, Inc. also incorporate a Financing Security Agreement. These agreements suggest that franchisees may need to enter into security agreements with third-party financing companies to facilitate their business operations.
In practical terms, this means that as a prospective Aunt Millies Bakeries franchisee, you should carefully review the Security Agreement and understand its implications. This agreement likely outlines the collateral you must provide to secure financing or other obligations to Aunt Millies Bakeries or its affiliated financing companies. It is advisable to seek legal counsel to fully understand the terms and conditions of the Security Agreement and how it may affect your rights and obligations as a franchisee.