Is the Aerus Consignee required to execute additional documents to confirm the Company's security interest?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
To secure the due and punctual payment of all amounts due to Company for the proceeds arising from the sale or return to Company of the Consigned Products, Consignee hereby agrees that Company shall have, and hereby grants to and creates in favor of Company, a security interest in and to the Consigned Products and all proceeds thereof, as more fully-described on the Schedule of Collateral attached hereto (the "Collateral"). Consignee shall pay the cost of filing or recording this Agreement and any related financing statement in all public offices and the cost of all searches of records, wherever filing or recording or searching of records is deemed by Company to be necessary. At the request of Company, Consignee shall, from time to time, execute additional or supplemental documents and agreements to confirm Company's security interest in the Collateral.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to the 2025 Aerus Franchise Disclosure Document, as a Consignee, you are required to execute additional or supplemental documents and agreements to confirm Aerus's security interest in the collateral if Aerus requests it. This collateral refers to the consigned products and all proceeds from them, as detailed in the Schedule of Collateral. This schedule encompasses all present and future rights, titles, and interests in the inventory, including attachments, renewals, replacements, accessories, and proceeds.
This requirement ensures that Aerus maintains a secured interest in the consigned products and their proceeds, protecting their investment. The Consignee is also responsible for covering the costs associated with filing or recording the Consigned Products Security Agreement and any related financing statements. This includes the expenses for searches of records deemed necessary by Aerus.
This clause in the Consigned Products Security Agreement is a standard practice in consignment arrangements to protect the consignor's (Aerus's) interests. It is important for a prospective Aerus franchisee to understand these obligations and factor in the potential costs associated with these filings and searches. The franchisee should seek clarification from Aerus regarding the frequency and estimated costs of these additional filings to better prepare for these financial responsibilities.