What is the purpose of the ACF Financing Security Agreement for Bimbo Foods Bakeries Distribution?
Bimbo_Foods_Bakeries_Distribution Franchise · 2025 FDDAnswer from 2025 FDD Document
- 1. GRANT OF SECURITY INTEREST: To secure the full and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of each of the Obligations (as hereafter defined), Borrower hereby grants, conveys, assigns and transfers to Secured Party a security interest in and to the following personal property:
- a) any and all assets and rights that Borrower may have under, or are associated with, the distribution agreement between Bimbo Foods Bakeries Distribution, LLC ("BFBD") and Borrower, including without limitation all assets acquired via any bill of sale related thereto, whether now or hereafter existing or acquired;
- b) a handheld computer device for ordering BFBD products and its associated printer;
- c) all accounts, accounts receivable, contract rights and chattel paper related to or arising from Borrower's business, whether now or hereafter existing or acquired;
- d) all equipment, inventory, goods, property, customer lists, and general intangibles related to or arising from Borrower's business, whether now or hereafter existing or acquired and wherever located;
- e) any and all accessions, replacements and additions to or of the foregoing; and
- f) all cash or non-cash proceeds (including insurance proceeds) of the foregoing, the items described in a), b), c), d), e), and f) above being hereinafter collectively referred to as the "Collateral."
- 2. THE OBLIGATIONS: The "Obligations" secured hereby are:
- a) the outstanding principal of, and all interest on the Promissory Note dated on or about the date of this Agreement in the original principal amount of **«Total
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to Bimbo Foods Bakeries Distribution's 2025 Franchise Disclosure Document, the ACF Financing Security Agreement serves to secure the loan provided by ACF (Advantafirst Capital Financial Services, Inc.) to the distributor. The agreement ensures that Bimbo Foods Bakeries Distribution has a security interest in specific assets of the distributor's business until the loan obligations are fully met. These obligations include the principal and interest on the promissory note, as well as all other debts, liabilities, and agreements outlined in the financing agreement.
The security interest granted to the Secured Party (ACF) covers a range of assets. This includes assets and rights associated with the distribution agreement between Bimbo Foods Bakeries Distribution and the distributor, such as those acquired via any bill of sale. It also encompasses a handheld computer device used for ordering products, along with its associated printer. Furthermore, the security interest extends to all accounts, accounts receivable, contract rights, chattel paper, equipment, inventory, customer lists, and general intangibles related to the distributor's business.
In essence, the ACF Financing Security Agreement protects ACF's investment by giving them a claim on the distributor's business assets in case of default. For a prospective Bimbo Foods Bakeries Distribution distributor, this means that if they finance their distribution rights through ACF, a significant portion of their business assets will be pledged as collateral. This is a standard practice in financing agreements, but it's crucial for the distributor to understand the implications of this security interest and the potential risks involved if they are unable to meet their loan obligations.