What documents must a Browns Chicken franchisee execute regarding the security interest granted to Brown?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
J. Pledge of Assets.
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 Browns Chicken's 2025 Franchise Disclosure Document, as security for all payments and obligations, the franchisee must grant Browns Chicken a continuing security interest in certain franchisee property, as described in Rider D of the Franchise Agreement.
The franchisee is required to execute a Security Agreement and Financing Statement, which will be in the form detailed in Rider D. Browns Chicken is given consent to file a Uniform Commercial Code Financing Statement, using the form attached as Rider F, against the collateral described in Rider E.
The franchisee is prohibited from allowing any other financing statement or lien to be filed against the property outlined in Rider D, with the exception of Browns Chicken's lien. However, Browns Chicken will not unreasonably withhold consent for the franchisee to file a lien against the collateral if it is with a lender providing financing for the establishment of the Browns Chicken franchised business. In such cases, Browns Chicken will agree to subordinate its lien to the lender's lien. Upon failure of the franchisee to perform any term or pay any sum due under the Franchise Agreement, Browns Chicken has the right to take immediate possession of the property identified in Rider D without notice.