What does the Debtor grant to the Secured Party in the Big Apple Bagels Security Agreement?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
A: all equipment, furniture, fixtures, inventory, personal property, supplies, general intangibles, accounts receivable, accounts, contract rights, chattel paper and instruments, now owned or hereafter acquired by the Debtor, and all additions and accessions to, and all proceeds and products of the foregoing ("Collateral"). | | | 3. | Debtor hereby grants to Secured Party a security interest in the Collateral described in | | paragraph 2 above, to secure all debts, obligations and liabilities of Debtor to Secured Party arising
out of the Franchise Agreement described in Paragraph A of the Recitals.
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- The Collateral will be located at the addresses noted on Schedule A hereto. Debtor will not, without Secured Party's consent, remove the Collateral from the locations noted on Schedule A
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- Debtor will not, without Secured Party's consent: (i) allow the Collateral to become an accession to other goods; (ii) sell, lease, otherwise transfer, manufacture, process, assemble, or furnish under contracts of service, the Collateral, except goods identified herein as inventory and sold in the ordinary course of business; or (iii) allow the Collateral to be affixed to real estate, except goods identified herein as fixtures.
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- Debtor hereby authorizes Secured Party to file Uniform Commercial Code ("UCC") Financing Statements to enable Secured Party to perfect this security interest by filing pursuant to the Uniform Commercial Code as adopted by the state where the BAGELS Stores noted on Schedule A are located.
Source: Item 22 — CONTRACTS (FDD pages 86–87)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, the Debtor grants the Secured Party a security interest in the Collateral described in paragraph 2 of the Security Agreement. This collateral secures all debts, obligations, and liabilities the Debtor owes to the Secured Party, arising from the Franchise Agreement detailed in Paragraph A of the Recitals.
The collateral encompasses all property located at or related to the Big Apple Bagels stores listed on Schedule A. This includes equipment, furniture, fixtures, inventory, personal property, supplies, general intangibles, accounts receivable, accounts, contract rights, chattel paper, and instruments. It also covers anything the Debtor currently owns or acquires in the future, along with any additions, accessions, proceeds, and products derived from these items.
This security interest ensures that Big Apple Bagels (the Secured Party) has a claim on the franchisee's (Debtor's) business assets to cover any financial obligations arising from the franchise agreement. The franchisee cannot remove the collateral from the locations listed on Schedule A without the consent of Big Apple Bagels. The franchisee also needs consent from Big Apple Bagels to allow the Collateral to become an accession to other goods; (ii) sell, lease, otherwise transfer, manufacture, process, assemble, or furnish under contracts of service, the Collateral, except goods identified herein as inventory and sold in the ordinary course of business; or (iii) allow the Collateral to be affixed to real estate, except goods identified herein as fixtures.
Big Apple Bagels is authorized to file Uniform Commercial Code (UCC) Financing Statements to perfect the security interest. Upon default under the Franchise Agreement, Big Apple Bagels has all rights available to it under the Commercial Code of the state where the BAGELS Stores are located.