What secures the obligations evidenced by the Note for Big O Tires?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
All obligations evidenced by this Note are secured by security agreements and financing statements (the "Security Instruments") relating to all accounts receivables, inventory, equipment, fixtures, intangibles and other assets of Maker's Big O Tires Store at [Type Store Address, City, State, Zip] ("Big O Tires Store") (collectively the "Collateral"). This Note, the Security Instruments, and all
Source: Item 23 — RECEIPTS (FDD pages 102–535)
What This Means (2025 FDD)
According to Big O Tires' 2025 Franchise Disclosure Document, the obligations evidenced by the Note are secured by security agreements and financing statements, referred to as the "Security Instruments." These instruments relate to the accounts receivables, inventory, equipment, fixtures, intangibles, and other assets of the franchisee's Big O Tires store, collectively known as the "Collateral."
In addition to the standard security instruments, 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. The collateral also encompasses all improvements made on the Big O Tires store property.
This security arrangement means that Big O Tires has a legal claim on these assets. If a franchisee defaults on their obligations under the Note, Big O Tires can seize and sell these assets to recover the outstanding debt. This arrangement protects Big O Tires' financial interests in the event of franchisee default and provides them with recourse beyond simply pursuing legal action against the franchisee personally.