Are the rights of the Secured Party exclusive of each other in the Aunt Millies Bakeries agreement?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
s of the date first above written.
| BORROWER |
|---|
Exhibit J(2) Financing Documents with Distribution Services of America, Inc. Financing Security Agreement
THIS AGREEMENT, made effective ___________, 20___, by and between Distribution Services of America, Inc., a Florida corporation with offices at 2900 Westchester Avenue, Purchase, New York (herein called the "Secured Party") and DISTRIBUTOR'S CORPORATE NAME, residing at DISTRIBUTOR'S ADDRESS, (herein called the "Borrower").
W I T N E S S E T H :
In consideration of the premises and agreements contained herein and other good and valuable consideration, the sufficiency and receipt of which is hereby acknowledged, the parties agree as follows:
- 1. GRANT OF SECURITY INTEREST: To secure the full and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of each of the Obligations (as hereafter defined), the Borrower hereby grants, conveys, assigns and transfers to Secured Party a security interest in and to the following personal property:
- a) any and all rights that the Borrower may have under the Distributor's Agreement between PERFECTION 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)
Based on the 2025 Aunt Millies Bakeries Franchise Disclosure Document, the agreement outlines the security interest granted to the Secured Party, but it does not explicitly state whether these rights are exclusive of each other. The document details the collateral securing the obligations, which includes rights under the Distributor's Agreement, equipment, inventory, accounts, contract rights, and proceeds from the borrower's business. It also specifies the obligations secured, such as the principal and interest on the promissory note and all debts and agreements within the Financing Security Agreement. However, the FDD does not clarify if the Secured Party's rights are mutually exclusive.
For a prospective Aunt Millies Bakeries franchisee, this lack of clarity could have implications regarding the extent and enforcement of the security interest. If the rights are not exclusive, it might mean that the Secured Party has some limitations in exercising those rights.
To fully understand the scope and nature of the Secured Party's rights, a prospective franchisee should seek clarification from Aunt Millies Bakeries regarding the exclusivity of these rights and how they might impact the franchisee's obligations and business operations. Specifically, the franchisee should ask the franchisor to explain whether the secured party's rights can be exercised independently or are subject to any limitations or dependencies.