What is the Debtor granting to the Secured Party in the Big Apple Bagels Security Agreement?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
| | This Security Agreement dated is by and between | | |------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--| | | BAB Systems, Inc., an Illinois corporation, of 500 Lake Cook Road, Suite 475, Deerfield, Illinois | | | 60015 | ("Secured Party") and | | | | , whose principal place of business is ("Debtor"). RECITALS | | | A. | Debtor is a franchisee under a Franchise Agreement dated ("Franchise Agreement") with Secured Party as Franchisor, pursuant to which Franchise Agreement Debtor has ongoing monetary and non-monetary obligations to Secured Party. | | | B. | Debtor has locations at which Debtor operates businesses known as "Big Apple Bagels" ("BAGELS Stores"), pursuant to the Franchise Agreement; the addresses of the locations are listed on Schedule "A" attached hereto and incorporated herein by reference. | | | C. | Debtor is giving Secured Party a security interest in the collateral described in this | | | Agreement. | NOW THEREFORE, in consideration of the several and mutual covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: | | | 1. | The Recitals set forth above shall be incorporated into this part of the Agreement as though they were fully set forth herein. | | | 2. | Description of Collateral: the following property located at or relating to the BAGELS Stores noted on Schedule 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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Source: Item 22 — CONTRACTS (FDD pages 86–87)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, the Debtor (the franchisee) grants the Secured Party (BAB Systems, Inc.) a security interest in specific collateral to secure debts and obligations arising from the Franchise Agreement. This collateral encompasses property located at or relating to the BAGELS Stores, as listed on Schedule A of the agreement.
The collateral includes all equipment, furniture, fixtures, inventory, personal property, and supplies. It also extends to general intangibles, accounts receivable, accounts, contract rights, chattel paper, and instruments, whether currently owned or acquired in the future. Furthermore, the security interest covers all additions, accessions, proceeds, and products derived from the aforementioned items.
This security interest ensures that Big Apple Bagels has a claim on these assets if the franchisee defaults on their obligations under the Franchise Agreement. The franchisee is restricted from removing the collateral from the locations specified in Schedule A without the consent of Big Apple Bagels. Additionally, the franchisee needs consent to allow the collateral to become an accession to other goods, or to sell, lease, transfer, manufacture, process, assemble, or furnish the collateral (except for inventory sold in the ordinary course of business). The franchisee also cannot allow the collateral to be affixed to real estate, except for items identified as fixtures.