Is the Bft Franchise Agreement considered a Security Agreement and Financing Statement?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
- 17.8 Survival. All of Franchisor's and Franchisee's (and Franchisee's Owners') obligations which expressly or by their nature survive this Agreement's expiration or termination will continue in full force and effect subsequent to and notwithstanding its expiration or termination and until they are satisfied in full
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the Franchise Agreement serves as a Security Agreement and Financing Statement. Specifically, Bft is granted a security interest in all of the assets of the studio. This includes inventory, accounts, supplies, equipment, contracts, cash from operations, and proceeds from the sale of assets.
As a result of this security interest, Bft has the right to exercise the rights of a secured creditor if the franchisee defaults on their obligations under the Franchise Agreement. This allows Bft to take control of the studio's assets to recover any losses. Bft also has the right to request additional documentation from the franchisee to further secure their interest.
However, if a third-party lender requires Bft to subordinate its security interest to provide working capital to the franchisee for construction or operation, Bft will agree to do so under terms they determine. This clause allows Bft to maintain flexibility in financing arrangements while still protecting its interests through the security agreement.