What restrictive covenants are included in Aunt Millies Bakeries' credit agreements?

According to the 2025 Aunt Millies Bakeries FDD, the security agreement outlines several covenants that a borrower (likely a franchisee) must adhere to. The borrower is required to execute all proper financing statements for filing and to pay and perform all obligations secured by the agreement according to its terms. These obligations are tied to a Promissory Note with an original principal amount of a specified loan amount, as well as all debts, liabilities, obligations, covenants, and agreements contained within the Financing Security Agreement.

In practical terms, this means that a franchisee entering into a financing agreement with Aunt Millies Bakeries must be prepared to fulfill all financial responsibilities outlined in the Promissory Note and the broader Financing Security Agreement. This includes making timely payments on the loan principal and interest, as well as adhering to any other covenants specified in the agreement. Failure to meet these obligations could result in the loss of the assets used as collateral, which include rights under the Distributor's Agreement with Perfection Bakeries, all equipment, inventory, accounts, and other property related to the franchisee's business.

Prospective franchisees should carefully review the terms of the Financing Security Agreement and Promissory Note to fully understand their obligations and the potential consequences of non-compliance. It is crucial to assess one's financial capacity to meet these obligations and to seek legal counsel if needed to ensure a clear understanding of the agreement's terms and implications. Understanding these covenants is essential for maintaining a healthy financial relationship with Aunt Millies Bakeries and avoiding potential default scenarios.