Besides sale and assignment, what other actions constitute a 'transfer' by the franchisee under the Aerus agreement?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
| Category | Section in Agreement | Summary |
|---|---|---|
| j. Assignment of | Section 20 | No restriction on right to transfer |
| contract by Franchisor | ||
| k. "Transfer" by | Section 20 and | Includes sale, assignment, grant, conveyance, pledge, |
| Franchisee-defined | Addendums A and C | hypothecation or encumbrance. |
| l. Franchisor approval of transfer by Franchisee | Addendum C | You must obtain our consent before transferring any interest in the Franchise Agreement, in the assets of the Franchised Business, or any ownership interest in the franchisee (if the franchisee is not a natural person). |
| m. Conditions for Franchisor approval of transfer | Addendum C | Conditions include, among others: You must pay a transfer fee. The transferee also must sign current Franchise Agreement or enter into written agreement assuming all of your obligations. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 56–60)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, a 'transfer' by the franchisee includes more than just a sale or assignment of the franchise. Specifically, it encompasses any grant, conveyance, pledge, hypothecation, or encumbrance of the franchise. This broad definition means that any action that creates a security interest or otherwise burdens the franchise can be considered a transfer.
This definition has significant implications for prospective Aerus franchisees. It means that franchisees must obtain Aerus's consent before undertaking a wide range of financial transactions that could affect the ownership or control of the franchise. For example, if a franchisee wants to take out a loan and use the franchise as collateral, that would likely be considered a transfer requiring franchisor approval.
Aerus requires franchisees to obtain their consent before transferring any interest in the Franchise Agreement, the assets of the Franchised Business, or any ownership interest in the franchisee (if the franchisee is not a natural person). Conditions for approval include paying a transfer fee and the transferee signing the current Franchise Agreement or entering into a written agreement assuming all of the franchisee's obligations.