Is the Collateral used for business or personal purposes for a Big Apple Bagels franchise?

According to the 2025 Big Apple Bagels Franchise Disclosure Document, the collateral used to secure debts and obligations related to the Franchise Agreement is explicitly designated for business purposes. This means that any assets used as collateral, as outlined in Schedule A, are acknowledged by both parties to be for business use only and not for personal, family, or household purposes. This distinction is important because it affects the legal framework governing the collateral and any potential actions taken in the event of default.

For a prospective Big Apple Bagels franchisee, this clause clarifies that any assets pledged as collateral will be treated as business assets. This could have implications for how the franchisee structures their business and manages their personal and business finances. It also means that the franchisor's rights and remedies in case of default will be governed by commercial law rather than consumer protection laws.

This provision protects both Big Apple Bagels and the franchisee by clearly defining the nature of the collateral. It ensures that the collateral is subject to the appropriate legal standards and that both parties understand their rights and obligations regarding the collateral. Franchisees should carefully review Schedule A to understand what assets are being used as collateral and ensure they are comfortable with the terms of the security agreement.