According to the Aerus security agreement, what does the term 'Debt' encompass?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
(d) "Debt" shall mean (i) all the indebtedness of Debtor evidenced by the Note, both principal and interest, and any and all extensions, renewals or refinancing thereof in whole or in part, (ii) all costs and expenses incurred by Secured Party in any collection of such indebtedness, including, without limitation, reasonable attorney's fees and costs, (iii) all future advances made by Secured Party for the protection and preservation of the Collateral or any portion thereof, (iv) all other obligations and liabilities of Debtor to Secured Party from time to time arising under or pursuant to this Security Agreement, (v) all indebtedness and obligations arising under or incurred in connection with the transactions contemplated by the Franchise Agreement; and (vi) all other existing and future indebtedness, liabilities and obligations of Debtor to Secured Party, Aerus LLC, and/or their affiliates, whether now or hereafter existing whether or not related to this Security Agreement or the Note, whether or not contemplated by Secured Party or Debtor at the date hereof, whether absolute or contingent, joint and/or several, including without limitation all indebtedness, obligations and liabilities of Debtor to Secured Party incurred pursuant to any extension, renewal or substitutions of any Debt;
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, the security agreement defines 'Debt' broadly. It includes all indebtedness evidenced by the Secured Promissory Note, covering both principal and interest. This also extends to any renewals or refinancing of the note, whether in whole or in part.
Furthermore, the definition of 'Debt' encompasses all costs and expenses Aerus incurs while collecting such indebtedness. This includes reasonable attorney's fees and costs, future advances made by Aerus to protect the collateral, and all other obligations the franchisee owes to Aerus under the security agreement. It also covers indebtedness and obligations arising from transactions related to the Franchise Agreement.
Finally, 'Debt' includes all other existing and future indebtedness, liabilities, and obligations of the franchisee to Aerus, Aerus LLC, and/or their affiliates. This applies whether or not the debt is related to the security agreement or the note, and whether or not it was contemplated by Aerus or the franchisee at the time of the agreement. This includes absolute or contingent liabilities, whether joint or several, and any extensions, renewals, or substitutions of any debt.
This comprehensive definition means that Aerus has a wide range of claims that can be secured by the collateral. Prospective franchisees should carefully consider the implications of this broad definition and seek legal counsel to fully understand their obligations.