What is Schedule A in the Big Apple Bagels Security Agreement used to define?
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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- Debtor will not, without Secured Party's consent: (i) allow the Collateral to become an accession to other goods;
Source: Item 22 — CONTRACTS (FDD pages 86–87)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, Schedule A of the Security Agreement lists the addresses of the locations where the franchisee operates their Big Apple Bagels stores. This is significant because the collateral, which includes equipment, furniture, fixtures, inventory, and other property, is located at or related to these store locations. The franchisee grants Big Apple Bagels a security interest in this collateral to secure their obligations under the Franchise Agreement.
The Security Agreement specifies that the franchisee cannot move the collateral from the locations listed on Schedule A without Big Apple Bagels' consent. This provision ensures that the assets used as security remain at the designated store locations, providing Big Apple Bagels with a stable and accessible source of collateral in case of default. The agreement also authorizes Big Apple Bagels to file Uniform Commercial Code (UCC) Financing Statements to perfect their security interest in the collateral, further protecting their investment.
In the event of a default under the Franchise Agreement, Big Apple Bagels has the right to exercise all remedies available under the Commercial Code of the state where the stores listed on Schedule A are located. This includes the right to seize and liquidate the collateral to satisfy the franchisee's outstanding debts and obligations. The Security Agreement explicitly states that the collateral is used for business purposes, not personal, family, or household purposes, reinforcing the commercial nature of the agreement.