What debts, obligations, and liabilities are secured by the security interest granted in the Browns Chicken Security Agreement?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
As security for payment of all sums due from Franchisee to Brown hereunder and for performance of any and all obligations of Franchisee as set forth in this Franchise Agreement, Franchisee shall and hereby does grant to Brown a continuing security interest in certain property of Franchisee as more particularly described on Rider D to this Franchise Agreement, and Franchisee shall execute a Security Agreement and Financing Statement in substantially the form set forth in Rider D hereto. Franchisee consents to Brown filing a Uniform Commercial Code Financing Statement in the form attached at Rider F hereto against the Collateral described on Rider E. Franchisee shall permit no financing statement or lien to be filed or recorded against the property identified in Rider D hereto other than Brown's lien as described herein. However, Brown will not unreasonably withhold its consent to the filing of a lien against the Collateral by a lender from whom Franchisee obtains financing in connection with the establishment of the franchised business. Brown will in such cases agree to subordinate its lien to that of the lender. Upon Franchisee's failure to perform any term or pay any sum due under this Franchise Agreement, Brown shall have the right, without notice to Franchisee, to take immediate possession of the property identified on Rider D hereto, which Rider D is incorporated herein by this reference.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to the 2025 Browns Chicken Franchise Disclosure Document, the security interest granted in the Security Agreement serves as security for the franchisee's obligations to Browns Chicken. Specifically, the franchisee (referred to as "Debtor") grants Browns Chicken (referred to as "Secured Party") a security interest in the described collateral as security for payment of all sums due from Franchisee to Brown hereunder and for performance of any and all obligations of Franchisee as set forth in this Franchise Agreement. This encompasses both monetary and non-monetary obligations the franchisee has to Browns Chicken under the Franchise Agreement.
The collateral subject to this security interest includes all property located at or relating to the Browns Chicken & Pasta store at the premises. This includes 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.
In practical terms, this means that if a Browns Chicken franchisee fails to meet their financial or operational obligations as outlined in the Franchise Agreement, Browns Chicken has the right to seize the specified collateral. This collateral can then be sold to recover the outstanding debts or to ensure compliance with the franchisee's obligations. This is a standard practice in franchising, providing the franchisor with a legal mechanism to protect their investment and brand standards.