What items are included as 'Collateral' in the security interest granted by a Nothing Bundt Cakes franchisee?
Nothing_Bundt_Cakes Franchise · 2025 FDDAnswer from 2025 FDD Document
You hereby grant us a security interest ("Security Interest") in all of the furniture, fixtures, equipment, signage, and realty (including your interests in all real property and personal property leases) of the Bakery, together with all similar property now owned or hereafter acquired, and additions, substitutions, replacements, proceeds, and products thereof, wherever located, used in connection with the Bakery. All items in which a security interest is granted are referred to as the "Collateral," and secure any indebtedness against us or our affiliates (the "Indebtedness"). Upon default and termination of your rights under this Agreement, we will have the immediate right to possession and use of the Collateral. In addition to any other rights or remedies we may have, you agree that, with the occurrence of any default set forth above, the full amount remaining unpaid on the Indebtedness secured shall, at our option and without notice, become due and payable immediately, and we will then have the rights, options, duties, and remedies of a secured party thereunder, and we will have the rights and duties of a creditor, including, without limitation, our right to take possession of the Collateral and, without legal process, to enter any premises where the Collateral may be found. Any sale of the Collateral may be conducted by us in a commercially reasonable manner. Reasonable notification of the time and place of any sale shall be satisfied by mailing to you pursuant to the notice provisions set forth above.
Source: Item 23 — RECEIPTS (FDD pages 93–309)
What This Means (2025 FDD)
According to Nothing Bundt Cakes's 2025 Franchise Disclosure Document, franchisees grant a security interest to Nothing Bundt Cakes in specific items, referred to as "Collateral." This Collateral includes all furniture, fixtures, equipment, signage, and realty associated with the bakery. Realty includes interests in both real property and personal property leases. The security interest extends to similar property acquired later, as well as any additions, substitutions, replacements, proceeds, and products derived from these items.
This security interest serves to secure any indebtedness the franchisee may have against Nothing Bundt Cakes or its affiliates. Should the franchisee default and their rights under the Franchise Agreement terminate, Nothing Bundt Cakes has the immediate right to possess and use the Collateral.
Nothing Bundt Cakes also has the right to take possession of the Collateral without legal process and enter any premises where the Collateral is located. The FDD states that any sale of the Collateral will be conducted in a commercially reasonable manner, with reasonable notification of the sale provided to the franchisee.