What documents must a Bath Tune Up franchisee sign to obtain financing?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
To obtain financing, you must sign a Secured Promissory Note and General Security Agreement substantially in the form of Exhibits J and K to this disclosure document. No separate personal guaranty is required to obtain financing. Payments begin with the first royalty due date. The note can be prepaid without penalty at any time during its term. The General Security Agreement grants us a security interest in substantially all of your assets to secure your payments under the Secured Promissory Note. You waive your right to notice of a collection action and to assert any defenses to collection against us.
Source: Item 10 — FINANCING (FDD pages 26–27)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, a franchisee seeking financing from the franchisor must sign specific documents. To secure financing from Bath Tune Up, a franchisee is required to sign a Secured Promissory Note and a General Security Agreement. These documents are substantially in the form of Exhibits J and K of the FDD.
The General Security Agreement grants Bath Tune Up a security interest in substantially all of the franchisee's assets. This means that Bath Tune Up has a claim on the franchisee's assets if the franchisee fails to make payments under the Secured Promissory Note. Additionally, the franchisee waives their right to notice of a collection action and to assert any defenses against Bath Tune Up in the event of a collection action.
It is important for a prospective Bath Tune Up franchisee to carefully review Exhibits J and K, as these documents outline the specific terms and conditions of the financing arrangement, including the obligations and rights of both the franchisee and Bath Tune Up. Understanding these documents is crucial before signing, as they have significant legal and financial implications.