What is the condition for granting a security interest in the assets of a Bens Soft Pretzels franchise?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Guarantee. In the case of an installment sale for which we have consented to you or any Owner retaining a security interest or other financial interest in this Agreement or the business operated thereunder, you or such Owner, and the guarantors, are obligated to guarantee the performance under this Agreement until the final close of the installment sale or the termination of such interest, as the case may be.
Source: Item 22 — CONTRACTS (FDD pages 46–47)
What This Means (2025 FDD)
According to the 2025 Bens Soft Pretzels Franchise Disclosure Document, if a franchisee engages in an installment sale and wants to retain a security interest or other financial interest in the franchise agreement or the business, Bens Soft Pretzels requires a guarantee. Specifically, the franchisee, any owner, and the guarantors must guarantee performance under the Franchise Agreement. This obligation remains until the final close of the installment sale or the termination of the interest.
This condition ensures that even if the franchise is sold in installments, the original franchisee and their guarantors remain responsible for upholding the terms of the agreement. This protects Bens Soft Pretzels' interests by maintaining accountability throughout the installment sale period.
For a prospective franchisee, this means that selling the franchise on an installment basis while retaining a security interest requires a continued commitment to the franchise's performance. They, along with any owners and guarantors, cannot simply walk away after the sale begins but must ensure the franchise operates according to the agreement until the installment sale is complete.