What must an Aerus debtor do if they desire to change its jurisdiction of formation?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
B. If a business entity:
- (1) Franchisee is duly organized and validly existing under the law of the jurisdiction of its formation and is duly qualified and authorized to do business in each jurisdiction in which the Franchised Business will operate;
- (2) Franchisee's charter documents currently provide and will at all future times provide that Franchisee's activities shall be confined exclusively to the ownership and operation of an Aerus Business, unless Company otherwise consents in writing;
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, if a franchisee is a business entity, its charter documents must stipulate that its activities are confined exclusively to the ownership and operation of an Aerus Business, unless Aerus provides written consent otherwise. This requirement applies at all times during the franchise agreement. Therefore, if a franchisee wishes to change its jurisdiction of formation, it appears they would need written consent from Aerus if the new jurisdiction's laws or regulations would allow the franchisee to engage in activities beyond operating the Aerus business.
This provision ensures that Aerus franchisees remain focused on their Aerus business and do not divert resources or attention to other ventures that could potentially compete with or detract from the Aerus brand. It also allows Aerus to maintain a degree of control over the franchisee's business activities, ensuring they align with Aerus's overall business strategy and standards.
For a prospective franchisee, this means they need to be aware that their business entity's activities are restricted to the Aerus franchise unless they obtain explicit written permission from Aerus to engage in other business ventures. This could impact their long-term business plans and should be carefully considered before entering into a franchise agreement with Aerus. It would be prudent to discuss potential future business diversification plans with Aerus during the due diligence phase to understand the likelihood of obtaining such consent.