What cost is the Aerus Consignee obligated to pay regarding the security interest?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
- Security Interest. 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 Aerus's 2025 Franchise Disclosure Document, the Consignee is responsible for specific costs related to the security interest. Aerus retains full legal and equitable title to the consigned products. To protect Aerus's interest in these products and the proceeds from their sale or return, the Consignee grants Aerus a security interest in the consigned products and all proceeds.
The Consignee is obligated to cover the expenses associated with filing or recording the agreement and any related financing statements in public offices. Additionally, the Consignee must pay for all searches of records that Aerus deems necessary. This means the franchisee bears the financial burden of ensuring the security interest is properly documented and searchable, protecting Aerus's claim to the consigned products.
Furthermore, at Aerus's request, the Consignee must execute additional documents to confirm Aerus's security interest in the collateral. This clause ensures Aerus can take necessary steps to solidify its security interest, and the Consignee is obligated to cooperate. This arrangement protects Aerus by ensuring their claim to the consigned products takes precedence over other potential creditors of the Consignee.