What is the Aerus debtor required to do before taking title to the Collateral?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
If Debtor desires to establish a new location for its principal place of business where Collateral or original books of account or records relating to the Collateral may be kept or to alter the exact legal name of Debtor in any manner or take title to the Collateral or change its jurisdiction of formation then Debtor shall first, with respect to each new location or name or jurisdiction of formation:
(1) Give Secured Party written notice of its intention to do so and provide Secured Party with such information in connection therewith as Secured Party may reasonably request; and
(2) Take such action, as directed by Secured Party as may be necessary to maintain at all times the perfection and first priority of the security interest in the Collateral granted to Secured Party hereunder.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, if a debtor (franchisee) desires to take title to the collateral, they must first provide written notice to Aerus Franchising (the Secured Party). This notice must include any information reasonably requested by Aerus Franchising.
Additionally, the debtor must take any action directed by Aerus Franchising that is deemed necessary to maintain the perfection and first priority of the security interest in the collateral granted to Aerus Franchising. This ensures that Aerus Franchising's interest in the collateral remains protected even as the title changes.
This requirement protects Aerus Franchising's financial interests by ensuring they maintain a secure position regarding the collateral, even if the franchisee's business undergoes changes such as altering its legal name or jurisdiction of formation. Prospective franchisees should be aware of these obligations, as failure to comply could potentially trigger an event of default under the security agreement.