What is the 'Security Agreement' referring to in 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 Bath Tune Up's 2025 Franchise Disclosure Document, the 'General Security Agreement' is listed as Exhibit K in the franchise agreement documents. The document states that the franchisee ('Pledgor') and Bath Tune Up are the parties that sign this agreement.
In franchising, a security agreement typically outlines the collateral a franchisee pledges to the franchisor to secure obligations, such as loans or performance requirements. This agreement gives the franchisor a legal claim on specific assets if the franchisee fails to meet their financial or contractual obligations.
Prospective Bath Tune Up franchisees should carefully review Exhibit K with a legal professional to fully understand the assets they are pledging and the conditions under which Bath Tune Up could claim those assets. Understanding the security agreement is crucial for assessing the financial risks associated with the franchise.