What does the Big O Tires agreement state about the debtor's title to the collateral?

According to the 2025 Big O Tires Franchise Disclosure Document, the obligations under a promissory note are secured by security agreements and financing statements, referred to as "Security Instruments." These instruments relate to the accounts receivables, inventory, equipment, fixtures, intangibles, and other assets of the franchisee's Big O Tires store, which are collectively termed "Collateral."

This means that if a Big O Tires franchisee takes out a loan to finance their business, the lender (Holder) will have a security interest in the assets of the store. This security interest gives the lender the right to seize and sell those assets if the franchisee defaults on the loan. The collateral extends to various tangible and intangible assets, ensuring a comprehensive security base for the lender.

Furthermore, the agreement specifies events that can trigger a default, such as selling or transferring any interest in the Big O Tires store or its collateral outside the normal course of business or in violation of the loan documents. This provision protects the lender's interest by preventing the franchisee from diminishing the value of the collateral without the lender's consent. The security instruments may also include a mortgage or deed of trust on the Big O Tires store property if the property is owned by the franchisee or an affiliated party, and the collateral includes all improvements on the store property, providing an additional layer of security for the lender.