What is the Chesters franchisee's obligation regarding the granting of a security interest under the UCC?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
You shall keep the Collateral free from any and all liens and encumbrances other than those in our favor.
You shall give us immediate notice of any attachment or other judicial process, liens or encumbrances affecting the Collateral.
You hereby irrevocably authorize us and appoint us as your attorney-in-fact with the power to execute and to file this EFA and any financing statement(s) or security agreement(s) with respect to the Collateral.
If your signature on any financing statement or similar document is required by law, you shall execute such supplemental instruments and financing statements we deem to be necessary and advisable and shall otherwise cooperate to defend and perfect our interest in the Collateral by filing or otherwise.
You also agree to pay us on demand filing and registration fees prescribed by the UCC or other law.
Any Collateral that is subject to title or registration laws shall be titled and registered as directed by us.
Source: Item 23 — **RECEIPTS (FDD pages 48–197)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, as a franchisee, you must keep the collateral free from any liens and encumbrances other than those in Chesters' favor. You are required to provide immediate notice to Chesters of any attachments or other judicial processes, liens, or encumbrances affecting the collateral.
Furthermore, the agreement states that you irrevocably authorize Chesters and appoint them as your attorney-in-fact with the power to execute and file the EFA (Equipment Finance Agreement) and any financing statements or security agreements related to the collateral. If your signature is required on any financing statement or similar document by law, you must execute such supplemental instruments and financing statements that Chesters deems necessary and advisable. You are also expected to cooperate in defending and perfecting Chesters' interest in the collateral by filing or otherwise.
Additionally, you agree to pay on demand all filing and registration fees prescribed by the UCC (Uniform Commercial Code) or other laws. Any collateral that is subject to title or registration laws must be titled and registered as directed by Chesters. These measures ensure that Chesters maintains a secured interest in the collateral, protecting their investment and rights under the franchise agreement.