What costs and expenses does the security interest granted to Boulder Designs secure?

According to Boulder Designs' 2025 Franchise Disclosure Document, the security interest granted by the franchisee (Debtor) to Boulder Designs Franchising, LLC (Payee) secures the debt evidenced by the promissory note associated with the franchise agreement. This security interest also covers all costs and expenses incurred by Boulder Designs in the collection of the debt.

In practical terms, this means that if a franchisee borrows money from Boulder Designs to finance their franchise, Boulder Designs has a legal claim on the franchisee's assets (inventory, furniture, fixtures, equipment, and supplies) to ensure the loan is repaid. This claim extends not only to the original debt amount but also to any legal or collection fees Boulder Designs incurs if the franchisee fails to pay.

This is a fairly standard practice in franchising, as it protects the franchisor's financial interests. The franchisee should carefully review the promissory note and security agreement to fully understand the scope of the collateral and the conditions under which Boulder Designs can exercise its rights under the security interest. The franchisee should also be aware that they cannot grant a security interest in the collateral to another party without Boulder Designs' prior written consent.