What assets of the Bft Studio does the Franchisee collaterally assign to the Franchisor as a security interest?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
17.7 Security Interest. Franchisee hereby collaterally assigns to Franchisor the lease for the Authorized Location and grants Franchisor a security interest in all of the assets of the Studio, including but not limited to inventory, accounts, supplies, equipment, contracts, cash derived from the operation of the Studio and sale of other assets, and proceeds and products of all those assets. Franchisee agrees to execute such other documents as Franchisor may reasonably request in order to further document, perfect and record its security interest. If Franchisee defaults in any of its obligations under this Agreement, Franchisor may exercise all rights of a secured creditor granted to Franchisor by law, in addition to Franchisor's other rights under this Agreement and at law. If an approved third-party lender requires that Franchisor subordinate Franchisor's security interest in the assets of the Studio as a condition to lending Franchisee working capital for the construction or operation of the Studio, Franchisor will agree to subordinate pursuant to terms and conditions determined by Franchisor. This Agreement shall be deemed to be a Security Agreement and Financing Statement and may be filed for record as such in the records of any county and state that Franchisor deems appropriate to protect its interests.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, as a condition of the franchise agreement, the franchisee collaterally assigns certain assets to Bft as a security interest. This means that Bft has a claim on these assets if the franchisee defaults on their obligations.
The assets include the lease for the authorized location of the Bft studio. Additionally, Bft is granted a security interest in all assets of the studio. These assets include, but are not limited to, inventory, accounts, supplies, equipment, contracts, cash derived from the operation of the studio and sale of other assets, and proceeds and products of all those assets.
Bft retains the right to request additional documentation from the franchisee to further document, perfect, and record its security interest. If the franchisee defaults, Bft can exercise the rights of a secured creditor as granted by law, in addition to any other rights Bft has under the franchise agreement or at law. However, Bft will agree to subordinate its security interest if a third-party lender requires it as a condition of lending the franchisee working capital for construction or operation of the studio, with the specific terms and conditions determined by Bft.