How is the Baseline for the Aerus Franchised Business defined?

According to Aerus's 2025 Franchise Disclosure Document, the baseline for the franchised business under the Standard Program is a key component of the Minimum Sales Requirement, focusing on Core Unit sales. The baseline is defined as the higher of two figures: either 45 Core Units per quarter for each Approved Location (excluding Licensed Outlets and Satellites), or the average quarterly Core Unit sales volume for the franchised business since the Approved Location became part of a franchised business. However, the latter standard will only be implemented after Aerus provides 90 days' written notice.

This means that when franchisees start, their initial baseline is set at 45 Core Units per quarter. Once the franchisee has operated for a while and established a sales history, Aerus may switch the baseline calculation to the franchisee's historical average quarterly sales volume if that average exceeds the initial 45-unit benchmark. This ensures that the minimum sales expectations are adjusted to reflect the actual performance of the location over time.

For prospective franchisees, this means that the Minimum Sales Requirement can change. Initially, it is set at a fixed number of units, but it can transition to a performance-based metric. Franchisees should pay close attention to their sales figures and be prepared for a potential increase in their Minimum Sales Requirement after receiving the 90-day notice from Aerus. Understanding how the baseline is calculated and when it might change is crucial for managing expectations and ensuring compliance with the Franchise Agreement. Failing to meet the Minimum Sales Requirement can result in the termination of the Franchise Agreement.