What does the term 'Collateral' refer to in the Bb.Q Chicken franchise agreement?

According to the 2025 Bb.Q Chicken Franchise Disclosure Document, Attachment 2 to the franchise agreement is titled "Collateral Assignment of Lease." This suggests that 'collateral' in this context refers to the assignment of the lease agreement as security.

In franchising, a collateral assignment of lease is a common practice where the franchisee's rights under the property lease are assigned to the franchisor as collateral. This protects the franchisor's interest in maintaining the Bb.Q Chicken location should the franchisee default on their obligations. If the franchisee fails to meet the terms of the franchise agreement, Bb.Q Chicken can step in and take over the lease to continue operating the business or transfer it to another franchisee.

For a prospective Bb.Q Chicken franchisee, this means that the lease for their restaurant location will be subject to an agreement that allows Bb.Q Chicken to assume control of the lease under certain circumstances. This is a standard security measure in franchising, but franchisees should carefully review the terms of the collateral assignment to understand their rights and obligations, and the conditions under which Bb.Q Chicken can exercise its rights.