What does the security interest granted to Cilantro Taco Grill secure?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
- 21.13 Security Interest.
Franchisee grants to Franchisor a security interest ("Security Interest") in all of the furniture, fixtures, equipment, signage, and realty (including Franchisee's interests under all real property and personal property leases) of the Restaurant, together with all similar property now owned or hereafter acquired, additions, substitutions, replacements, proceeds, and products thereof, wherever located, used in connection with the Restaurant.
All items in which a security interest is granted are referred to as the "Collateral".
- 21.13.1 The Security Interest is to secure payment of the following (the "Indebtedness"): all amounts due under this Agreement or otherwise by Franchisee; all sums which Franchisor may, at its option, expend or advance for the maintenance, preservation, and protection of the Collateral, including, without limitation, payment of rent, taxes, levies, assessments, insurance premiums, and discharge of liens, together with interest, or any other property given as security for payment of the Indebtedness; all expenses, including reasonable attorneys' fees, which Franchisor incurs in connection with collecting any or all Indebtedness secured hereby or in enforcing or protecting its rights under the Security Interest and this Agreement; and all other present or future, direct or indirect, absolute or contingent, liabilities, obligations, and indebtedness of Franchisee to Franchisor or third parties under this Agreement, however created, and specifically including all or part of any renewal or extension of this Agreement, whether or not Franchisee executes any extension agreement or renewal instruments.
Franchisor's security interest, as described herein, shall be subordinated to any financing related to Franchisee's
Source: Item 23 — RECEIPT (FDD pages 52–208)
What This Means (2024 FDD)
According to the 2024 Cilantro Taco Grill Franchise Disclosure Document, the security interest granted to Cilantro Taco Grill by the franchisee secures several financial obligations. This security interest applies to all furniture, fixtures, equipment, signage, and realty (including interests in real and personal property leases) used in connection with the restaurant. This also includes any similar property acquired later, additions, substitutions, replacements, proceeds, and products, regardless of location. This collection of items is referred to as the "Collateral".
The security interest ensures the payment of all amounts due to Cilantro Taco Grill under the Franchise Agreement or otherwise. It covers sums that Cilantro Taco Grill may expend to maintain, preserve, and protect the collateral, including rent, taxes, insurance premiums, and the discharge of liens. The security interest also extends to all expenses, including reasonable attorney's fees, incurred by Cilantro Taco Grill in collecting any amounts owed or in enforcing its rights under the security interest and the Franchise Agreement.
Furthermore, the security interest secures all present or future, direct or indirect, absolute or contingent liabilities, obligations, and indebtedness of the franchisee to Cilantro Taco Grill or third parties under the Franchise Agreement. This includes any renewals or extensions of the agreement, whether or not the franchisee formally executes extension agreements or renewal instruments. However, Cilantro Taco Grill's security interest is subordinated to any financing related to the franchisee's.