What specific items are included in the collateral for the Crave franchise security interest?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
the Franchise Agreement, they are executing the document and intending to attach their electronic signature to it. Furthermore, the parties acknowledge that the other parties to the Franchise Agreement can rely on an electronic signature as the respective party's signature.
ARTICLE 20 SECURITY INTERESTS
20.1 Collateral
You grant to us a security interest ("Security Interest") in all of the furniture, fixtures, equipment, signage, and realty (including your interests under all real property and personal property leases) of the
Franchised Business, together with all similar property now owned or hereafter acquired, additions, substitutions, replacements, proceeds, and products thereof, wherever located,
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, the collateral for the security interest granted to Crave includes specific assets of the franchised business. This security interest covers all furniture, fixtures, equipment, signage, and realty used in connection with the franchised business. This also extends to the franchisee's interests in all real property and personal property leases.
In practical terms, this means that if a franchisee defaults on their obligations to Crave, Crave has the right to seize these specified assets. The collateral also includes any similar property acquired after the agreement, additions, substitutions, replacements, proceeds, and products derived from these assets, regardless of their location. This broad definition ensures that Crave has a comprehensive claim on the business assets to secure the franchisee's indebtedness.
It is important to note that Crave's security interest is subordinated to any financing related to the franchisee's operation of the franchised business. This subordination includes real property mortgages and equipment leases. This means that if a franchisee has a mortgage on the property or leases equipment, those lenders would have priority over Crave's security interest in those specific assets. Franchisees should fully understand the implications of this security interest and how it interacts with other financing arrangements they may have.