Does the Byrider franchise agreement allow the franchisee to pledge assets of the business to a lender for financing?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
| THIS ACCEPTANCE AND ASSUMPTION OF OBLIGATIONS (the "Agreement") is made as of the Effective Date by and between BYRIDER FRANCHISING PARTNERS, LLC ("us"), ("Franchisee"), |
|---|
| , |
| a |
| having |
| its |
| principal place of business at the same address as the Franchisee (the "Finance Entity"), and the |
| undersigned Guarantors. The Effective Date is the date we sign this Agreement as shown beneath |
| our signature on the signature page. |
| RECITALS |
| A. |
| We and Franchisee are parties to a Franchise Agreement, dated, |
| pursuant to which we granted Franchisee the right and license, and Franchisee undertook the |
| obligation, to own and operate a Business, including both a Byrider sales division and a CNAC |
| finance |
| division, |
| at |
| (the |
| "Franchise Agreement"). Each of the undersigned Guarantors has executed a Personal Guaranty |
| and Assumption of Franchisee's Obligations (each a "Guarantee Agreement"). |
| B. |
| Franchisee has advised us that it has created the Finance Entity for purposes of |
| conducting the CNAC financing and collection portion of the Business (the "Financing |
| Activities") under and as described in the Franchise Agreement. |
| C. |
| We are willing to consent to the operation of the Finance Entity, as described in |
| Recital B, subject to the terms and conditions set forth in this Agreement. |
| D. |
| Capitalized terms used but not defined in this Agreement shall have the meanings |
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
Based on the 2025 Byrider Franchise Disclosure Document excerpts, it's not explicitly stated whether a franchisee can pledge business assets to a lender for financing. However, the document includes an 'Acceptance and Assumption of Obligations' agreement involving Byrider Franchising Partners, the franchisee, a Finance Entity, and Guarantors. This agreement acknowledges that the franchisee may create a Finance Entity to manage the CNAC (finance division) financing and collection aspects of the business.
Given the existence of a Finance Entity, it is plausible that Byrider franchisees might need to secure financing to support the CNAC operations. The documents do not explicitly prohibit or allow the pledging of assets. The agreement indicates Byrider's willingness to consent to the operation of this Finance Entity, suggesting some level of flexibility in how franchisees structure their financing.
A prospective franchisee should directly ask Byrider about the specific policies and restrictions regarding pledging business assets for financing. Understanding the franchisor's stance on this matter is crucial for franchisees who may need to seek external funding to grow their Byrider business.