What is the purpose of the Security Agreement for a Bath Tune Up franchise?
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 Bath Tune Up's 2025 Franchise Disclosure Document, the purpose of the General Security Agreement is outlined in Exhibit K. The document indicates that as a franchisee (Pledgor), you and Bath Tune Up (us) will be parties to this agreement.
In essence, the Security Agreement likely serves to protect Bath Tune Up's financial interests by providing them with a security interest in certain assets of the franchisee. This is a common practice in franchising, where the franchisor wants to ensure that they have recourse in case the franchisee defaults on their financial obligations.
Prospective franchisees should carefully review Exhibit K of the FDD and the actual General Security Agreement with a legal professional to fully understand the assets that will be subject to the security interest, the conditions under which Bath Tune Up can exercise its rights under the agreement, and the potential implications for the franchisee's business and personal assets.