What criteria does Aerus use to assess the credit risk of a franchisee regarding notes receivable?

Based on the 2025 Aerus Franchise Disclosure Document, the document does not specify the exact criteria Aerus uses to assess the credit risk of a franchisee regarding notes receivable. However, it does mention that notes receivable from franchisees relate to sales of franchise rights to the company's branch locations and certain branch assets to franchisees. These notes typically bear interest from 7-10% per annum and have original terms of three to five years and are unsecured.

In 2020, Aerus began financing notes to franchisees for fees paid to become a Beyond Franchise, which allows the franchisee to sell items not available to other franchises. For the years ended December 31, 2024 and 2023, $24,175 and $39,980 in notes were financed by the company, respectively, for Beyond Franchises. These notes do not bear interest.

To fully understand Aerus's credit risk assessment criteria, a prospective franchisee should ask Aerus for detailed information on their specific process. This includes understanding what credit scores, financial documents, or other factors Aerus considers when deciding to finance a franchisee's notes receivable. Additionally, it would be beneficial to understand the recourse Aerus has in the event of a franchisee default on these notes.