What assets collateralize the notes payable to stockholders for Capriottis Sandwich Shop?

According to Capriottis Sandwich Shop's 2025 Franchise Disclosure Document, several notes payable to stockholders are collateralized by the company's assets. These notes have varying interest rates and due dates. Specifically, some notes payable to stockholders have interest rates ranging from 7.00% to 10% and are due through January 2026, while others range from 8.00% to 12.00% and are due through February 2026. All these notes are collateralized by the company's assets.

This means that if Capriottis Sandwich Shop defaults on these notes, the stockholders have a legal claim to the company's assets up to the amount of the outstanding debt. The assets could include anything the company owns, such as equipment, real estate, accounts receivable, and intellectual property. The stockholders would have priority over other unsecured creditors in claiming these assets.

For a prospective franchisee, this information is relevant because it provides insight into the company's financial obligations and the security provided to its lenders. While it's common for companies to use their assets as collateral for loans, a franchisee should consider the overall debt level and the implications if Capriottis Sandwich Shop were to face financial difficulties. High levels of secured debt could limit the company's flexibility and increase the risk of financial distress, which could indirectly affect franchisees.

It is important to note that the specific assets that serve as collateral are not detailed in this excerpt, only that the notes are broadly collateralized by the 'Company's assets'. A prospective franchisee should seek clarification from Capriottis Sandwich Shop regarding which specific assets are pledged as collateral and the total value of those assets to fully understand the implications of these secured debts.