What is the Aerus debtor required to do before changing 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;
- (3) Franchisee has provided to Company for review certified copies of its articles of organization or other charter documents, any amendments thereto, resolutions of its Board of Directors or Board of Managers, or consent of its limited partners, authorizing and consenting to entry into and performance of this Agreement, and any certificates, buy-sell agreements or other documents restricting the sale or transfer of equity of the entity, and any other documents as Company may reasonably require prior to the execution of this Agreement;
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
The 2025 Aerus Franchise Disclosure Document states that if the franchisee is a business entity, it must be duly organized and validly existing under the law of the jurisdiction of its formation. The franchisee must also be duly qualified and authorized to do business in each jurisdiction in which the franchised business will operate.
According to the FDD, the franchisee's charter documents must stipulate that its activities are confined exclusively to the ownership and operation of an Aerus Business, unless Aerus consents in writing. This means that without written consent from Aerus, the franchisee cannot engage in any business activities outside of operating the Aerus franchise.
Furthermore, the franchisee must provide Aerus with certified copies of its articles of organization or other charter documents, any amendments thereto, resolutions of its Board of Directors or Board of Managers, or consent of its limited partners, authorizing and consenting to entry into and performance of the Franchise Agreement. The franchisee must also provide any certificates, buy-sell agreements or other documents restricting the sale or transfer of equity of the entity, and any other documents as Aerus may reasonably require prior to the execution of the Franchise Agreement. This comprehensive disclosure ensures Aerus has full visibility into the franchisee's organizational structure and any restrictions on its ownership or operations.