What is the advance written notice period Aerus must provide to terminate the consignment agreement for any reason?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
This Agreement may be terminated by Company for any reason upon thirty days prior written notice, however, the security interest in the Collateral shall survive until payment in full has been made for products consigned from Company.
In addition, the following shall be "Events of Default" under this Agreement: (a) Consignee shall default under this Agreement or fail to perform or observe any of the agreements or covenants set forth in this Agreement or fail to pay when due any invoice or invoices covering products subject to this Agreement; (b) Consignee shall be declared to be in default under any material contract, agreement, or instrument to which Consignee is a party with Company or Aerus Franchising, or either of their affiliates or assigns, including without limitation the Franchise Agreement and documents incidental or related thereto, and such default shall continue beyond any applicable cure period; (c) Consignee shall sell, remove, or attempt to sell, remove, or assign Collateral not in the ordinary course of business; (d) any creditor of Consignee shall obtain possession of any Collateral by means including, without limitation, levy, distraint, replevin or self-help.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, the company can terminate the consignment agreement for any reason by providing the franchisee with thirty days prior written notice. However, even after termination, Aerus retains a security interest in the consigned products until full payment is received for those products.
In addition to termination for any reason with thirty days' notice, the agreement can be terminated immediately if the franchisee defaults. Events of default include failing to meet obligations within the agreement, being in default under any agreement with Aerus or its affiliates (including the Franchise Agreement), selling or removing collateral outside the normal course of business, or if a creditor of the franchisee takes possession of any collateral.
This means that Aerus franchisees need to be aware of the conditions under which their consignment agreement can be terminated, both with and without cause. Maintaining good standing with Aerus and managing their business responsibly is crucial to avoid potential default and immediate termination of the consignment agreement.