Is a Buona franchisee required to execute a standard Security Agreement in addition to the franchise agreement?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
In order to secure the prompt performance by Franchisor of the obligations of this Agreement, Franchisee hereby grants Franchisor a security interest in all rights, entitlements, licenses and interests granted under this Agreement or otherwise inuring to Franchisee by reason hereof, and all goods, wares, products, inventory, accounts, proceeds, furniture, equipment, fixtures, commercial tort claims, general intangibles and all other personal property interests of Franchisee arising or used in connection with the Franchised Business, whether at the Approved Location or elsewhere, and whether now owned or hereafter acquired by Franchisee.
This Agreement shall, in and of itself, constitute a Security Agreement within the meaning of the Uniform Commercial Code.
In addition, and as a supplement to this Agreement, Franchisee shall execute Franchisor's standard Security Agreement as set forth in Exhibit F to this Agreement In order to perfect the security interest granted hereby and by the Security Agreement attached hereto, Franchisee authorizes Franchisor to file any financing statement, continuation statement, statement of amendment, other statement or filing used or useful under the Uniform Commercial Code, including any amendment or replacement thereof, to perfect Franchisor's security interest as provided herein.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, a franchisee is required to execute Buona's standard Security Agreement, which is detailed in Exhibit F of the agreement. This requirement supplements the security interest that Buona is granted within the franchise agreement itself.
The security agreement grants Buona a security interest in all rights, entitlements, licenses, and interests the franchisee has under the agreement. This extends to all goods, wares, products, inventory, accounts, proceeds, furniture, equipment, fixtures, commercial tort claims, general intangibles, and all other personal property interests the franchisee has that arise from or are used in connection with the franchised business, whether at the approved location or elsewhere, and whether currently owned or acquired in the future.
Buona is authorized to file any financing statement, continuation statement, statement of amendment, or other filing under the Uniform Commercial Code to perfect its security interest. This ensures Buona's financial interests are protected in the event a franchisee defaults on their obligations.