Under the General Security Agreement for Bath Tune Up, who is 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' under the General Security Agreement is HFC KTU LLC, a Delaware limited liability company. This agreement is dated as of a specific date that is not provided in the excerpt. The agreement is between the Pledgor and the Secured Party.
This agreement is put in place because the Pledgor (likely the franchisee) has issued a Secured Promissory Note in favor of the Secured Party (HFC KTU LLC). The Secured Party is providing financial accommodations to the Pledgor, and as a condition of providing these accommodations, the Secured Party requires a security interest in substantially all of the Pledgor's assets. This ensures that Bath Tune Up has a claim on the franchisee's assets if the franchisee defaults on their financial obligations under the Note.
In simpler terms, if a Bath Tune Up franchisee takes out a loan or receives financial assistance from HFC KTU LLC, they must agree to the General Security Agreement. This agreement allows HFC KTU LLC to claim the franchisee's assets if the franchisee fails to repay the loan. This is a common practice in franchising to protect the financial interests of the lending party when providing financial support to franchisees.