What specific items are included as 'Collateral' in the security interest granted to Crepe De Licious?

According to the 2025 Crepe De Licious Franchise Disclosure Document, as a franchisee, you grant Crepe De Licious a security interest in specific items related to your franchised business. This security interest, referred to as the "Security Interest," covers all furniture, fixtures, equipment, signage, and realty used in connection with the Franchised Business. This also includes your interests under all real property and personal property leases.

The security interest extends to similar property that you currently own or acquire in the future, including any additions, substitutions, replacements, proceeds, and products derived from these items. All of these items in which the security interest is granted are collectively referred to as the "Collateral."

This means that if you default on your obligations to Crepe De Licious, they have the right to seize and potentially sell these assets to recover any outstanding debts. However, the FDD also states that Crepe De Licious's security interest is subordinated to any financing related to your operation of the Franchised Business, including a real property mortgage and equipment leases. This subordination clause is a common practice in franchising, as it allows franchisees to obtain necessary financing for their business operations without the franchisor's security interest taking priority.