In the Aerus Security Agreement, what is the significance of the 'Effective Date'?
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").
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, the Effective Date in the context of the Security Agreement signifies the date on which the agreement becomes operative. For both the Franchise Agreement (Standard Program) and the Franchise Agreement (Associate Program), the agreement is made effective as of the date shown on the signature page, which is referred to as the Effective Date. This date is crucial because it marks the commencement of the legal obligations and rights outlined in the agreement between Aerus Franchising, LLC and the franchisee.
Specifically, the Consigned Products Security Agreement is executed simultaneously with the Franchise Agreement, and its Effective Date is the same date as the Franchise Agreement. This synchronicity ensures that the security interests in the consigned products are established at the same time the franchise relationship begins. Similarly, the Software License Agreement is also entered into simultaneously with the Franchise Agreement and shares the same Effective Date, linking the operational software license to the start of the franchise.
In the Security Agreement, the Effective Date is the date of execution by the Secured Party. The agreement specifies that the Debtor (franchisee) has entered into a Franchise Agreement with the Secured Party (Aerus Franchising, LLC). The Effective Date, therefore, legally binds the franchisee to the terms outlined in the Security Agreement from that point forward, securing the obligations detailed within the agreement. This date is essential for determining when Aerus's security interests are perfected and enforceable.