To what agreement does the Aerus Secured Promissory Note refer?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
THIS SECURITY AGREEMENT (this "Agreement"), is entered into as of the date of execution by "Secured Party" (the "Effective Date") by and between AERUS FRANCHISING, LLC, a Delaware limited liability company, having offices at 14841 Dallas Parkway, Suite 500, Dallas, Texas 75254 ("Aerus Franchising" or "Secured Party") and the individual or entity executing this Agreement as Purchaser ("Debtor").
WITNESSETH:
WHEREAS, Debtor has entered into a certain Franchise Agreement (the "Franchise Agreement") with Secured Party;
WHEREAS, Debtor has executed and delivered to Secured Party a certain Secured Promissory Note of even date herewith (including any replacement, renewal, revision or refinancing thereof, the "Note") to evidence the indebtedness of Debtor to Secured Party; and WHEREAS, as an inducement to Secured Party to extend credit as evidenced by the Note, Debtor desires to secure the Note in the manner hereinafter set forth;
NOW, THEREFORE, for and in consideration of the Debt (as hereinafter defined), and other good and valuable consideration rendered by Secured Party to Debtor, and intending to be legally bound hereby, the parties hereto covenant and agree as follows:
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, the Secured Promissory Note is related to the Franchise Agreement between the franchisee (Debtor) and Aerus Franchising, LLC (Secured Party). The note serves as evidence of the franchisee's indebtedness to Aerus, and the Security Agreement outlines how the note is secured. Specifically, the Debtor executes and delivers the Secured Promissory Note to evidence their debt to Aerus Franchising. As an incentive for Aerus to extend credit, the Debtor secures the note as outlined in the Security Agreement. This agreement is part of the broader financing arrangements Aerus offers to franchisees.
The Security Agreement details the collateral that secures the franchisee's obligations under the Secured Promissory Note. This collateral can include a wide range of assets, both tangible and intangible, such as accounts, inventory, equipment, contract rights, intellectual property, deposit accounts, and various other forms of property. The agreement also defines what constitutes "Debt," which includes the principal and interest of the note, collection costs, future advances made to protect the collateral, and any other obligations arising from the Security Agreement or the Franchise Agreement. This comprehensive definition ensures that Aerus has a broad claim on the franchisee's assets in case of default.
Exhibit 3 of the franchise disclosure document includes the Secured Promissory Note, Security Agreement, and Guaranty, indicating their importance in the franchising relationship. The documents work together to define the financial obligations and security interests between Aerus and its franchisees. Prospective franchisees should carefully review these documents with legal and financial advisors to fully understand their obligations and the potential risks associated with the financing arrangements.