What secures the Senior Notes for Moes Southwest Grill?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
The Co-Issuers' direct and indirect parents and their direct and indirect subsidiaries (collectively, the "Guarantors") are special-purpose, bankruptcy-remote, indirect wholly owned subsidiaries of the Company that hold substantially all the intellectual property and franchising-related assets. The Senior Notes are secured by substantially all the assets of the Guarantors. Each Guarantor is a separate entity and has separate creditors (from the Company and any of its non-Guarantor affiliates), and such Guarantor owns all its assets.
Other than the Guarantors, neither the Company nor any of its other direct or indirect subsidiaries guarantees or is in any way liable for the obligations under the Senior Notes. GTFL, has, however, agreed to cause the performance of certain obligations of the Guarantors in return for a management fee under the terms of a management agreement (the "Securitization Management Agreement").
GTFL manages and services the Co-Issuers' and the Guarantors' assets in its capacity as the manager under the Securitization Management Agreement. The primary responsibilities of the manager are to administer collections and otherwise service the managed assets on behalf of the Co-Issuers and the Guarantors, and to perform certain franchising, intellectual property, and operational and reporting services on behalf of the Co-Issuers and the Guarantors with respect to the managed assets.
Source: Item 23 — Receipts (FDD pages 92–334)
What This Means (2025 FDD)
According to the 2025 FDD, the Senior Notes are secured by substantially all the assets of the Guarantors. The Guarantors, which include the direct and indirect parents and subsidiaries of the Co-Issuers, are special-purpose, bankruptcy-remote, indirect wholly-owned subsidiaries of the Company. These Guarantors hold substantially all the intellectual property and franchising-related assets.
Each Guarantor operates as a separate entity with its own creditors, distinct from Moes Southwest Grill and its non-Guarantor affiliates, and owns all its assets independently. This arrangement provides a level of security for the Senior Notes, as the assets of these Guarantors are specifically earmarked to support the obligations tied to the notes.
It's important to note that neither Moes Southwest Grill nor any of its other direct or indirect subsidiaries guarantees or is liable for the obligations under the Senior Notes, with the exception of the Guarantors. However, GTFL has agreed to ensure the performance of certain obligations of the Guarantors in exchange for a management fee, as outlined in the Securitization Management Agreement. This agreement tasks GTFL with managing and servicing the assets of the Co-Issuers and the Guarantors, including administering collections and providing franchising, intellectual property, and operational services.