Does Bath Tune Up have the right to sell a franchisee's promissory note?

According to Bath Tune Up's 2025 Franchise Disclosure Document, Bath Tune Up has the right to sell a franchisee's promissory note to a third party at a discount. This means that if a franchisee finances their franchise fee through Bath Tune Up and signs a promissory note, Bath Tune Up can sell that note to another company.

This transfer could have implications for the franchisee because the third party may have different collection practices or may not be subject to the same legal defenses that the franchisee could raise against Bath Tune Up. The FDD states that the third party "may be immune under the law to any defenses to payment you may have against us." This means that if the franchisee has a dispute with Bath Tune Up, they might not be able to use that dispute as a reason to withhold payment from the third party holding the note.

It is important to note that while Bath Tune Up has the right to sell the promissory note, the FDD also states that they have never done so. However, prospective franchisees should be aware of this possibility and consider its potential impact on their financing arrangements. Franchisees are advised to carefully review the terms of the Secured Promissory Note and General Security Agreement, which are included as Exhibits J and K to the disclosure document, to fully understand their obligations and rights.