What is the relationship between the Security Agreement and the Secured Promissory Note for Bath Tune Up?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
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Miami, Florida February 14, 2025
TRICE HATERANSE COERS ! P
HFC KTU LLC (dba Kitchen Tune-Up and Bath Tune-Up) Balance Sheets
| 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 |
**HFC KTU LLC (dba Kitchen Tune-Up and Bath T
Source: Item 23 — RECEIPTS (FDD pages 52–222)
What This Means (2025 FDD)
According to the 2025 Bath Tune Up Franchise Disclosure Document, the Secured Promissory Note and the General Security Agreement are separate exhibits that a franchisee will sign as part of the franchising process. Specifically, the Secured Promissory Note is listed as Exhibit J, and the General Security Agreement is listed as Exhibit K.
The FDD indicates that upon an Event of Default, the Secured Party (presumably Bath Tune Up) has rights and remedies as detailed in Section 6.2 of the Security Agreement. This implies that the Security Agreement outlines the specific actions Bath Tune Up can take if the franchisee fails to meet the obligations defined in the Secured Promissory Note.
In essence, the Secured Promissory Note represents the franchisee's promise to pay a certain amount, likely related to the franchise fee or other financial obligations, while the Security Agreement provides Bath Tune Up with a security interest in certain assets of the franchisee. This security interest allows Bath Tune Up to seize and potentially liquidate those assets to recover the owed amount if the franchisee defaults on the Promissory Note. Prospective franchisees should carefully review both documents to understand their financial obligations and the potential consequences of default.