What is the purpose of the Security Agreement (Exhibit I) for Bimbo Foods Bakeries Distribution?
Bimbo_Foods_Bakeries_Distribution Franchise · 2025 FDDAnswer from 2025 FDD Document
The parties agree as follows:
- 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 the 2025 FDD, the Security Agreement for Bimbo Foods Bakeries Distribution serves to secure the franchisee's obligations to the secured party. The franchisee, referred to as the Borrower, grants a security interest to the Secured Party in various assets to ensure the full payment and performance of their obligations. These obligations include the principal and interest on a Promissory Note, as well as all other debts, liabilities, and agreements outlined in the Security Agreement. The promissory note is in the original principal amount of «Total_ACF_Loan_in_Words» («Total_ACF_Loan»).
The assets that the Borrower grants a security interest in, known as the Collateral, are extensive. This includes assets and rights associated with the distribution agreement between Bimbo Foods Bakeries Distribution and the Borrower, such as assets acquired through any related bill of sale. It also encompasses a handheld computer device used for ordering Bimbo Foods Bakeries Distribution products, along with its associated printer. Additionally, the Collateral includes all accounts, accounts receivable, contract rights, chattel paper, equipment, inventory, goods, property, customer lists, and general intangibles related to the franchisee's business.
This Security Agreement ensures that the Secured Party has a legal claim on the specified assets if the Bimbo Foods Bakeries Distribution franchisee fails to meet their financial obligations. This is a common practice in franchising, as it protects the lender or franchisor by providing a means of recovering funds in case of default. Prospective franchisees should carefully review the terms of the Security Agreement and understand the implications of granting a security interest in their assets.