What specific collateral is subject to Degree Wellness's lien under the Franchise Agreement?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
To secure your performance under this Agreement and indebtedness for all sums due us or our affiliates, we shall have a lien upon, and you hereby grant us a security interest in, the following collateral and any and all additions, accessions, and substitutions to or for it and the proceeds from all of the same: (a) all inventory now owned or after-acquired by the Franchise, including but not limited to all inventory and supplies transferred to or acquired by you in connection with this Agreement; (b) all accounts of the Franchise now existing or subsequently arising, together with all interest in the Franchise, now existing or subsequently arising, together with all chattel paper, documents, and instruments relating to such accounts; (c) all contract rights of the Franchise, now existing or subsequently arising including, without limitation, accounts receivable and other contractual rights to payment from others; (d) all general intangibles of the Franchise, now owned or existing, or after-acquired or subsequently arising including, without limitation, all awards, damages, payments, escrowed monies, insurance proceeds, and interest, fees, charges or payments accruing on or received from or to be received on any of the foregoing in any way; and (e) all products, proceeds, substitutions, and replacements of any of the above described collateral.
You agree to execute such financing statements, instruments, and other documents, in a form satisfactory to us, that we deem necessary so that we may establish and maintain a valid security interest in and to these assets, and you authorize us to file, without your signature, such financing statements as we shall deem necessary or advisable to reflect the security interest granted herein.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, the company has a lien to secure a franchisee's performance under the Franchise Agreement and any debts owed to Degree Wellness or its affiliates. This lien extends to specific collateral, granting Degree Wellness a security interest in these assets.
The collateral includes all inventory owned or acquired by the Degree Wellness franchise, encompassing all inventory and supplies transferred to or acquired by the franchisee in connection with the Franchise Agreement. It also covers all accounts of the franchise, both existing and future, along with any related chattel paper, documents, and instruments.
Furthermore, the lien applies to all contract rights of the Degree Wellness franchise, including accounts receivable and other contractual rights to payment from others. It extends to all general intangibles of the franchise, such as awards, damages, payments, escrowed monies, insurance proceeds, and any interest, fees, charges, or payments accruing on or received from the aforementioned assets. Finally, the lien encompasses all products, proceeds, substitutions, and replacements of any of the collateral described above.
As a Degree Wellness franchisee, you must execute financing statements and other documents that Degree Wellness deems necessary to establish and maintain their security interest in these assets. You also authorize Degree Wellness to file these financing statements without your signature, if necessary, to reflect the granted security interest.