Under the General Security Agreement for Bath Tune Up, who is considered the 'Secured Party'?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
| This General Security Agreement dated as of, is entered into by and |
|---|
| (collectively, "Pledgor") in favor of HFC KTU LLC, a |
| Delaware limited liability company ("Secured Party"). |
| WITNESSETH |
| WHEREAS, Pledgor has issued that certain Secured Promissory Note (the "Note") in favor of Secured |
| Party, dated as of, pursuant to which Secured Party has or is about to make |
| certain financial accommodations to Pledgor; and |
| WHEREAS, Secured Party has conditioned its providing said financial accommodations to Pledgor or |
| Pledgor's granting a security interest in substantially all of its assets in favor of Secured Party to secure |
| Pledgor's obligations to Secured Party under the Note; |
| NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth herein, and for |
| other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the |
| parties hereto agree as follows: |
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, the 'Secured Party' in the General Security Agreement is HFC KTU LLC, a Delaware limited liability company. This agreement outlines the terms under which a franchisee (the Pledgor) grants a security interest in their assets to HFC KTU LLC to secure their obligations under a Secured Promissory Note.
This arrangement means that HFC KTU LLC has a legal claim on the franchisee's assets as collateral for financial accommodations made to the franchisee. Should the franchisee default on their obligations, HFC KTU LLC has the right to seize and liquidate those assets to recover the debt.
Prospective Bath Tune Up franchisees should carefully review the terms of the General Security Agreement and the Secured Promissory Note to fully understand the extent of the security interest being granted and the potential consequences of default. It is advisable to seek legal counsel to assess the implications of this agreement on their personal and business finances.