Is the Collateral used for personal, family, or household purposes for a Browns Chicken franchise?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
| This Security Agreement dated is by and between | |
|---|---|
| Brown's Chicken, LLC, an Illinois corporation, of 55 E. Park Boulevard, Villa Park, Illinois 60181 | |
| ("Secured | |
| Party") | |
| and | |
| , whose principal place of business is | |
| ("Debtor"). | |
| RECITALS | |
| A. | |
| Debtor is a franchisee under a Franchise Agreement dated | |
| ("Franchise Agreement") with Secured Party as Franchisor, pursuant to which Franchise Agreement | |
| Debtor has ongoing monetary and non-monetary obligations to Secured Party. | |
| B. | |
| Debtor operates business as "Brown's Chicken & Pasta" pursuant to the Franchise | |
| Agreement, | |
| at | |
| the | |
| following | |
| location: | |
| ("Premises"). | |
| C. | |
| Debtor is giving Secured Party a security interest in the collateral described in this | |
| Agreement. | |
| NOW THEREFORE, in consideration of the several and mutual covenants set forth herein, and | |
| for other good and valuable consideration, the receipt and sufficiency of which are hereby | |
| acknowledged, the parties hereto agree as follows: | |
| 1. | |
| The Recitals set forth above shall be incorporated into this part of the Agreement as though | |
| they were fully set forth herein. | |
| 2. | |
| Description of Collateral: the following property located at or relating to the Brown's | |
| Chicken & Pasta Store at the Premises identified in Paragraph B of the Recitals. | |
| all equipment, furniture, fixtures, inventory, personal property, supplies, general intangibles, | |
| accounts receivable, accounts, contract rights, chattel paper and instruments, now owned or | |
| hereafter acquired by the Debtor, and all additions and accessions to, and all proceeds and | |
| products of the foregoing ("Collateral"). |
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to the 2025 Browns Chicken Franchise Disclosure Document, the collateral used for a Browns Chicken franchise is not intended for personal, family, or household purposes. The FDD outlines a security agreement where the franchisee (Debtor) grants Browns Chicken, LLC (Secured Party) a security interest in specific business-related collateral.
The collateral includes property located at or relating to the Browns Chicken & Pasta store, such as equipment, furniture, fixtures, inventory, personal property, supplies, general intangibles, accounts receivable, accounts, contract rights, chattel paper, and instruments, whether currently owned or acquired in the future. This collateral serves as security for the franchisee's monetary and non-monetary obligations to Browns Chicken, LLC, under the Franchise Agreement.
This arrangement is a standard business practice in franchising, where the franchisor takes a security interest in the franchisee's business assets to protect its investment and ensure compliance with the franchise agreement. The security interest allows Browns Chicken to have a claim on these assets in the event the franchisee defaults on their obligations. This is a risk mitigation measure for the franchisor and a condition of granting the franchise.