What happens to the security interest if the Beverly Anns Cookie loan is changed?
Beverly_Anns_Cookie Franchise · 2025 FDDAnswer from 2025 FDD Document
YOU MAY CHANGE THE TERMS OF THIS LOAN ONLY BY ANOTHER WRITTEN AGREEMENT BETWEEN YOU AND US.
YOU AGREE TO COMPLY WITH THE TERMS AND CONDITIONS OF THIS LOAN.
THIS LOAN IS NOT CANCELABLE.
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- LIMITATIONS ON CROSS-COLLATERALIZATION. The cross-collateralization clause on any existing or future loan, but not including this Loan, is void and ineffective as to this Loan, including any extension or refinancing.
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- SECURITY INTEREST. To secure the payment and performance of the Secured Debts, I grant you a security interest in all of the Property described in this Agreement that I own or have sufficient rights in which to transfer an interest, now or in the future, wherever the Property is or will be located, and all proceeds and products from the Property (including, but not limited to, all parts, accessories, repairs, replacements, improvements, and accessions to the Property). Property is all the collateral given as security for the Secured Debts and described in this Agreement, and includes all obligations that support the payment or performance of the Property.
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
According to the 2025 Beverly Anns Cookie Franchise Disclosure Document, any changes to the loan must be documented in writing to be legally enforceable. The Loan and Security Agreement from Auxilior Capital Partners states that the franchisee agrees to comply with the loan's terms and conditions, and the loan is not cancelable.
Specifically, the document stipulates that the terms of the loan can only be altered through another written agreement between the borrower and the lender. This means that any verbal promises or agreements not included in the written loan document may not be legally enforced. This protects both the lender and the franchisee by ensuring that all agreed-upon terms are clearly documented and legally binding.
Furthermore, the agreement includes a clause addressing cross-collateralization, stating that any such clauses in existing or future loans (excluding the current loan) are void and ineffective. This limitation ensures that the assets secured under this specific loan agreement are not subject to claims from other loans the franchisee may have. To secure the payment and performance of the debts, Beverly Anns Cookie is granted a security interest in the property described in the agreement.