Is a Crave franchisee required to execute financing statements pursuant to the Uniform Commercial Code?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
This Agreement shall be deemed a Security Agreement and a Financing Statement. This Agreement may be filed for record in the real estate records of each county in which the Collateral, or any part thereof, is situated and may also be filed as a Financing Statement in the counties or in the office of the Secretary of State, as appropriate, in respect of those items of Collateral of a kind or character defined in or subject to the applicable provisions of the Uniform Commercial Code as in effect in the appropriate jurisdiction.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, the Franchise Agreement itself acts as both a Security Agreement and a Financing Statement. This means that Crave may file the agreement in the real estate records of the county where the collateral is located.
Additionally, Crave can file the agreement as a Financing Statement with the relevant counties or the Secretary of State's office. This applies to collateral that falls under the Uniform Commercial Code provisions in the appropriate jurisdiction.
In practical terms, this clause allows Crave to protect its financial interest in the franchise by establishing a legal claim on the franchisee's assets, ensuring that Crave is in a secured position in case of franchisee default or bankruptcy. Franchisees should understand that this filing creates a public record of Crave's security interest in their business assets.