Under the Browns Chicken Security Agreement, what is included in the definition of 'Collateral' beyond equipment, furniture, and fixtures?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
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").
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, the security agreement defines 'Collateral' broadly. This agreement between Browns Chicken, LLC (the Secured Party) and the franchisee (the Debtor) grants Browns Chicken a security interest in various assets related to the Browns Chicken & Pasta store at the specified premises.
Beyond equipment, furniture, and fixtures, the definition of collateral also includes inventory, personal property, supplies, general intangibles, accounts receivable, accounts, contract rights, chattel paper, and instruments. This extends to all such items currently owned or acquired in the future by the franchisee. The definition further encompasses any additions, accessions, proceeds, and products derived from these assets.
For a prospective Browns Chicken franchisee, this means that Browns Chicken has a secured interest in a wide range of business assets, not just the physical equipment. This security interest protects Browns Chicken's financial stake in the franchise and allows them to seize these assets in case of a default by the franchisee. Franchisees should fully understand the implications of this security agreement and how it affects their rights and obligations regarding their business assets.