What action must Aerus take if the Franchise Agreement is terminated by Aerus?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
Termination of this Agreement shall automatically terminate any and all licenses and agreements made by Franchisee with Outlet Licensees and Sales Representatives.
- D.
Without limiting or restricting Company's right to terminate this Agreement at any time as provided herein, Company may implement a system of enforcement of the terms and provisions of this Agreement (including without limitation announced or unannounced compliance audits and "secret shopper" practices), which system may result in deferral of termination under certain circumstances and include any one or more of the following: (1) the imposition of fines or penalties associated with certain violations or breaches; (2) in the case of a royalty, impose a minimum or fixed amount to be paid in place of or in addition to the amount provided in Schedule 3 attached hereto; or (3) in the case of sales of the Products, impose the Minimum Sales Requirement set forth in Schedule 4 attached hereto.
The existence, substance and process of any such system would be the sole and exclusive discretion of Company and may be implemented, revoked or modified (upon reasonable notice to Franchisee) at any time and from time to time.
- E.
Upon expiration or termination of this Agreement, Franchisee and Franchisee's principals shall:
- (1) Immediately cease operation of the Franchised Business and any use of the Marks, Software and Administration Systems or the Customer Data for any reason or purpose; promptly remove all signs, markings, or other writings and, immediately discontinue all advertising or publicity, that tend to indicate that Franchisee is a franchisee of Company or seller of Products; and immediately discontinue all advertising or publicity and take all actions necessary to comply
with the foregoing, including instructing all publishers of any telephone directory or listing not to renew, repeat or insert any listing or advertisement using the word "Aerus", "Lux" or "Electrolux" or any other term or identifier associating Franchisee with Company.
- (2) Send written notice to all Outlet Licensees and Sales Representatives with whom Franchisee has been dealing that any license granted to or agreement made with such is terminated, and that such Outlet Licensees and Sales Representatives must also take all other steps herein required of Franchisee under this Section.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
The 2025 Aerus Franchise Disclosure Document outlines the actions the franchisee must take upon termination of the agreement; however, it does not specify any actions Aerus must take if Aerus terminates the Franchise Agreement. The FDD details the obligations of the franchisee, which include ceasing operations, discontinuing the use of Aerus's trademarks, and cooperating with Aerus to transfer phone numbers and cancel assumed name filings.
Specifically, the franchisee must notify all sales representatives and outlet licensees that their agreements are terminated. They must also return all company-owned property, pay outstanding debts, and deliver all information related to the franchised business to Aerus. These obligations ensure a clean break and protect Aerus's brand and confidential information.
Prospective franchisees should inquire with Aerus about the circumstances under which Aerus might terminate the agreement and whether Aerus has any specific obligations or procedures it follows in such cases. Understanding the termination process from both sides is crucial for making an informed investment decision.
While the FDD details the franchisee's responsibilities, it remains silent on any reciprocal duties or actions Aerus must undertake. This lack of information could be a point of negotiation or further clarification during the due diligence process.