Who must an Aerus depositor indemnify for any loss arising from a dishonored debit?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
The Depositor agrees with respect to any action taken pursuant to the above authorization:
- (1) To indemnify the Depository and hold it harmless from any loss it may suffer resulting from or in connection with any debit, including, without limitation, execution and issuance of any check, draft or order, whether or not genuine, purporting to be authorized or executed by the Payee and received by the Depository in the regular course of business for the purpose of payment, including any expenses reasonably incurred in connection therewith.
- (2) To indemnify Payee and the Depository for any loss arising in the event that any such debit shall be dishonored, whether with or without cause and whether intentionally or inadvertently.
- (3) To defend at Depositor's own expense any action which might be brought by a depositor or any other persons because of any actions taken by the Depository or Payee pursuant to the foregoing request and authorization, or in any manner arising by reason of the Depository's or Payee's participation therein.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, the depositor, who is the franchisee, agrees to indemnify both the Payee and the Depository for any loss arising if any debit is dishonored, regardless of the reason for the dishonor. The Payee in this case is Aerus Franchising, LLC (or its designee), and the Depository is the banking institution designated to honor the debits.
This means that if a debit from the franchisee's account to Aerus is not honored, the franchisee is responsible for covering any losses incurred by both the bank and Aerus. This could include situations where there are insufficient funds, account errors, or other issues that lead to the debit being rejected. The franchisee's responsibility extends to covering losses regardless of whether the dishonor was intentional or unintentional.
This requirement is part of the Electronic Funds Transfer Authorization that the franchisee signs, allowing Aerus to debit the franchisee's account for payments. The franchisee also agrees to defend, at their own expense, any legal actions brought by others due to actions taken by the Depository or Aerus related to this authorization. This arrangement protects Aerus and the Depository from financial losses and legal challenges resulting from dishonored payments, placing the onus on the franchisee to ensure sufficient funds and proper account management.