Under what condition will Bath Tune Up provide financing to franchisees?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
f agreements | Schedule 1 | Items 15 and 22 |
ITEM 10. FINANCING
If you meet our credit standards, we will, at your request, provide financing as shown below.
To obtain financing, you must sign a Secured Promissory Note and General Security Agreement substantially in the form of Exhibits J and K to this disclosure document. No separate personal guaranty is required to obtain financing. Payments begin with the first royalty due date. The note can be prepaid without penalty at any time during its term. The General Security Agreement grants us a security interest in substantially all of your assets to secure your payments under the Secured Promissory Note. You waive your right to notice of a collection action and to assert any defenses to collection against us.
Key terms are as follows:
| OBLIGATION | SECTION IN FRANCHISE AGREEMENT | DISCLOSURE DOCUMENT ITEM |
|---|---|---|
| u. Renewal | Section 5 | Item 17 |
| v. Post-termination obligations | Section 12 | Item 17 |
| w. Non-competition covenants | Section 8 and Exhibit H | Items 15 and 17 |
| x. Dispute resolution | Section 11 | Item 17 |
| y. |
Source: Item 10 — FINANCING (FDD pages 26–27)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, Bath Tune Up will provide financing to franchisees if they meet the franchisor's credit standards and request financing. To formalize the financing, the franchisee must sign a Secured Promissory Note and General Security Agreement, which are substantially in the form of Exhibits J and K of the FDD. A separate personal guaranty is not required to obtain financing.
The repayment schedule begins with the first royalty due date, and the franchisee can prepay the note without incurring any penalties at any point during its term. The General Security Agreement grants Bath Tune Up a security interest in substantially all of the franchisee's assets to secure payments under the Secured Promissory Note. The franchisee also waives their right to notice of a collection action and to assert any defenses against Bath Tune Up in such actions.
Bath Tune Up does not receive any payments from other parties for placing financing. Bath Tune Up retains the right to sell the franchisee's promissory note at a discount to a third party, who may not be subject to any defenses the franchisee could raise against Bath Tune Up. However, Bath Tune Up does not guarantee any notes, leases, or obligations.