What is the purpose of Rider D in the Browns Chicken franchise 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 Ride
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, Rider D to the franchise agreement pertains to the security interest Browns Chicken takes in the franchisee's property. Specifically, as security for the payment of all sums due to Browns Chicken under the franchise agreement and for the performance of all the franchisee's obligations, the franchisee grants Browns Chicken a continuing security interest in certain property.
This security interest is detailed further in Rider D, and the franchisee is required to execute a Security Agreement and Financing Statement, which is substantially in the form set forth in Rider D. Browns Chicken is given consent to file a Uniform Commercial Code Financing Statement based on the form attached to Rider D.
In simpler terms, Rider D ensures that Browns Chicken has a legal claim on some of the franchisee's assets, which can be used to recover any unpaid amounts or to ensure the franchisee fulfills their obligations under the franchise agreement. This is a common practice in franchising to protect the franchisor's financial interests and ensure compliance with the agreement.