What is the meaning of 'Obligor' in the context of the Bath Tune Up franchise agreement?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
| TITLE OF AGREEMENT | EXHIBIT/ SCHEDULE # | SIGNED BY |
|---|---|---|
| Franchise Agreement, State Addendum and Schedules | Exhibit A | You and us |
| Personal Covenant and Guarantee | Schedule 1 | All people having direct or indirect “Control”* over Franchisee or a direct or indirect beneficial ownership interest in Franchisee, including the spouse of Franchisee. |
| Consent to Transfer and Assumption of Franchise | Exhibit H | You, new franchisee and us |
| (includes Release of Claims) | ||
| Veteran’s Addendum to Franchise Agreement | Exhibit I | You (only if you are a veteran) and us |
| Secured Promissory Note | Exhibit J | You (Obligor) |
| General Security Agreement | Exhibit K | You (Pledgor) and us |
| Addendum to Franchise Agreement – Two Territories | Exhibit L | You (only if you purchase two territories) and us |
Source: Item 23 — RECEIPTS (FDD pages 52–222)
What This Means (2025 FDD)
According to the 2025 Bath Tune Up Franchise Disclosure Document, an 'Obligor' is defined within the context of a Secured Promissory Note. Specifically, the table in Item 23 indicates that when a franchisee signs a Secured Promissory Note (Exhibit J), they do so as the 'Obligor'.
In simpler terms, the 'Obligor' is the party who is obligated or bound to fulfill the terms of the promissory note, which typically involves repaying a debt. For a Bath Tune Up franchisee, this means that if they finance any portion of their franchise investment through a secured promissory note, they are the 'Obligor' responsible for repaying that loan according to the agreed-upon terms.
This designation carries significant legal and financial responsibilities. As the Obligor, the franchisee is legally bound to make timely payments and adhere to all conditions outlined in the promissory note. Failure to do so can result in penalties, legal action, and potential loss of assets used as security for the note. Therefore, prospective Bath Tune Up franchisees should carefully review and understand the terms of any Secured Promissory Note they sign, and seek legal counsel if needed, to fully grasp their obligations and potential risks.