What is the relationship between the Browns Chicken Franchise Agreement and the Security Agreement?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
ther persons because of your actions taken pursuant to the foregoing request, or in any manner arising by reason of your participation.
NOTICE TO OWNER
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- ATTACH ONE VOIDED CHECK HERE.
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- BE SURE ALL 8 SPACES SHOWN ABOVE ARE COMPLETED.
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- RETURN ALL THREE COPIES IMMEDIATELY.
| BROWN'S CHICKEN, LLC |
|---|
Rider D
TO THE STANDARD FRANCHISE AGREEMENT
SECURITY AGREEMENT AND FINANCING STATEMENT
SECURITY AGREEMENT
| 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"). |
- 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.
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Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to the 2025 Browns Chicken Franchise Disclosure Document, the Franchise Agreement and the Security Agreement are related in that the Security Agreement serves as a means to secure the franchisee's obligations under the Franchise Agreement. The franchisee grants Browns Chicken a security interest in certain property as a guarantee for the payment of all sums due and the performance of all obligations outlined in the Franchise Agreement. This is a fairly standard practice in franchising, where franchisors seek to protect their interests by securing the franchisee's commitments.
The Security Agreement itself describes the collateral, which includes equipment, furniture, fixtures, inventory, personal property, supplies, general intangibles, accounts receivable, accounts, contract rights, chattel paper, and instruments related to the Browns Chicken & Pasta store. This collateral is located at the premises of the franchised business. The agreement also incorporates recitals that acknowledge the franchisee's obligations under the Franchise Agreement and the granting of the security interest to Browns Chicken.
Browns Chicken retains the right to take immediate possession of the specified property if the franchisee fails to meet the terms of the Franchise Agreement or pay any due amounts. This provision underscores the importance of franchisees understanding and adhering to the terms of the Franchise Agreement to avoid potential loss of assets. Prospective franchisees should carefully review both the Franchise Agreement and the Security Agreement, paying close attention to the definitions of collateral and the conditions that trigger Browns Chicken's right to take possession of the secured assets.