What is the Debtor giving to the Secured Party in the Browns Chicken Security Agreement?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- Debtor hereby grants to Secured Party a security interest in the Collateral described in paragraph 2 above, to secure all debts, obligations and liabilities of Debtor to Secured Party arising
out of the Franchise Agreement described in Paragraph A of the Recitals.
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- The Collateral will be located at the Premises. Debtor will not, without Secured Party's consent, remove the Collateral from the Premises.
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- Debtor will not, without Secured Party's consent, allow the Collateral to become an accession to other goods; sells, lease, otherwise transfer, manufacture, process, assemble, or furnish under contracts of service, the Collateral, except goods identified herein as inventory and sold in the ordinary course of business; or allow the Collateral to be affixed to real estate, except goods identified herein as fixtures.
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- Debtor hereby authorizes Secured Party to file Uniform Commercial Code ("UCC") Financing Statements to enable Secured Party to perfect this security interest by filing pursuant to the Uniform Commercial Code as adopted by the state where the Premises are located. Debtor hereby waives any requirement or custom requiring Debtor to execute said UCC Financing Statements.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to the 2025 Browns Chicken Franchise Disclosure Document, the Debtor (the franchisee) is granting Browns Chicken, LLC (the Secured Party) a security interest in specific collateral as part of the Security Agreement. This collateral encompasses all property located at or related to the Browns Chicken & Pasta store at the premises.
Specifically, the collateral includes all 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. It also covers any additions, accessions, proceeds, and products derived from these items. This essentially means Browns Chicken has a claim on a wide range of the franchisee's business assets to secure the franchisee's obligations under the Franchise Agreement.
The security interest serves to secure all debts, obligations, and liabilities the franchisee owes to Browns Chicken arising from the Franchise Agreement. Browns Chicken is authorized to file Uniform Commercial Code (UCC) Financing Statements to perfect this security interest, and the franchisee waives any requirement for their signature on these statements. This gives Browns Chicken a legal claim on the specified assets in case the franchisee defaults on their obligations.