What is the reference to the Security Agreement in relation to the Aerus Secured Promissory Note?
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 Security Agreement is directly related to the Secured Promissory Note. Aerus Franchising, LLC, as the Secured Party, requires the Debtor (franchisee) to sign a Security Agreement as an inducement for extending credit, which is evidenced by the Secured Promissory Note. This agreement ensures that the note is secured in the manner outlined within the Security Agreement.
The Security Agreement outlines the collateral that Aerus can claim if the franchisee defaults on the Secured Promissory Note. This collateral includes a wide range of assets, both tangible and intangible, such as accounts, inventory, equipment, contract rights, intellectual property, deposit accounts, and any proceeds from these items. The agreement also defines what constitutes 'Debt,' including the principal and interest of the note, collection costs, and any obligations arising from the Franchise Agreement itself.
The Security Agreement also contains provisions regarding remedies, waivers, expenses, and notices. All rights and remedies available to Aerus are cumulative, meaning they can be used in conjunction with other legal options. The franchisee is responsible for reimbursing Aerus for all expenses related to enforcing the Security Agreement and collecting the debt. Notices regarding default or other matters can be given in person, by overnight delivery, or by certified mail to the franchisee's designated address. Prospective franchisees should carefully review the Security Agreement with a legal professional to fully understand the implications of securing their promissory note with their business and personal assets.