Does the definition of 'Collateral' for an Aerus franchise include after-acquired assets?

According to Aerus's 2025 Franchise Disclosure Document, the collateral associated with a consignment arrangement includes both currently owned and after-acquired inventory. Specifically, the Schedule of Collateral states that the collateral includes "all present and future right, title and interest of Consignee in and to all the inventory now owned or hereafter acquired." This means that any inventory an Aerus franchisee owns now or obtains in the future can be subject to a security interest held by Aerus Franchising, LLC.

This definition extends beyond just the inventory itself. It also encompasses "all attachments, renewals, replacements, additions, accessories, increases, parts, substitutes therefore and proceeds of the above and all guaranties, claims, rights, remedies and privileges relating to any of the foregoing." This broad scope suggests that anything related to the inventory, such as proceeds from its sale or any claims related to it, also falls under the definition of collateral.

For a prospective Aerus franchisee, this has significant implications. It means that Aerus Franchising, LLC has a security interest not only in the initial inventory but also in any new inventory acquired during the term of the franchise agreement. This could impact the franchisee's ability to obtain financing from other sources, as those lenders would likely take a secondary position to Aerus's security interest. Franchisees should carefully consider the implications of this broad definition of collateral and how it might affect their business operations and financial flexibility.