What does the security interest granted to Aerus by the consignee secure?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
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- 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 security interest granted to Aerus by the consignee secures the due and punctual payment of all amounts owed to Aerus. This includes proceeds arising from the sale or return of consigned products.
Specifically, the consignee grants Aerus a security interest in the consigned products and all proceeds from those products. This arrangement ensures that Aerus maintains a secured position regarding the inventory it consigns to the franchisee. The agreement explicitly states that Aerus retains full legal and equitable title to the consigned products, and the security agreement acts as a precaution to prioritize Aerus's rights over other potential creditors of the consignee.
Furthermore, the consignee is responsible for covering the costs associated with filing or recording the security agreement and any related financing statements. This includes fees for public filings and record searches deemed necessary by Aerus to protect its security interest. The consignee must also execute additional documents or agreements as requested by Aerus to confirm the company's security interest in the collateral.