Are future leasehold interests in equipment considered collateral for Bath Tune Up?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) all present and future contract rights, general intangibles (including tax and duty refunds, registered and unregistered patents, franchises, licenses, trademarks, service marks, copyrights, trade names, applications for the foregoing, trade secrets, goodwill, processes, drawings, blueprints, customer lists, licenses, whether as franchisor or franchisee, choses in action and other claims and existing and future leasehold interests in equipment, real estate and fixtures), chattel paper, documents, instruments, letters of credit, bankers' acceptances and guaranties,
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, future leasehold interests in equipment are considered collateral. Specifically, the franchise agreement encompasses all present and future contract rights, general intangibles, and existing and future leasehold interests in equipment, real estate, and fixtures as collateral. This means that these assets can be used as security for obligations to Bath Tune Up.
For a prospective Bath Tune Up franchisee, this has significant implications. If a franchisee obtains equipment through a lease, the rights to that equipment are considered collateral. This gives Bath Tune Up a security interest in those assets, which they can claim if the franchisee defaults on their obligations under the franchise agreement.
This is a fairly standard practice in franchising, where franchisors often seek to secure their interests through various forms of collateral. Franchisees should carefully review the franchise agreement and understand what assets are subject to these security interests. It is advisable to seek legal counsel to fully understand the implications of these provisions and how they might affect the franchisee's business and financial obligations.