Is the UCC-1 filing for Aunt Millies Bakeries dependent on the franchisee obtaining financing?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
ENT,** 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, whether now or hereafter existing or acquired and wherever located;
- c) any and all accessions, replacements and additions to or of the foregoing; and
- d) all cash or non-cash proceeds (including insurance proceeds) of the foregoing, the items described in a), b), c), and d) above being hereinafter collectively referred to as the "collateral".
- **2.
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to Aunt Millies Bakeries' 2025 Franchise Disclosure Document, the UCC-1 filing is related to securing debt obligations. Specifically, the distributor grants Aunt Millie's a security interest in their distribution rights, assets, and receivables to secure any indebtedness to Aunt Millie's. The distributor must execute a security agreement and financing statements to formalize this security interest. This indicates that the UCC-1 filing is tied to a security agreement that protects Aunt Millie's in case the distributor owes them money.
Furthermore, the FDD mentions a "Promissory Note of even date herewith in the original principal amount of LOAN AMOUNT ($____.00) DOLLARS made by Borrower payable to Secured Party, and any renewal, extension or refinancing thereof (the "Note"); and b) all debts, liabilities, obligations, covenants and agreements of the Borrower contained in this Financing Security Agreement." This suggests that if a franchisee obtains a loan, they will need to execute a security agreement.
In practical terms, this means that as a prospective Aunt Millie's franchisee, you will likely need to agree to a security interest in favor of Aunt Millie's to cover any debts or liabilities you may incur. This is a standard business practice to protect the franchisor's financial interests. The franchisor can file a UCC-1 to protect their financial interests.
It is important to note that the specific loan amount is not provided in the excerpt, and the terms are subject to the financing security agreement. As a prospective franchisee, you should carefully review the financing documents and security agreement with legal and financial advisors to fully understand your obligations and the implications of granting a security interest to Aunt Millie's.