What documents will an Aerus franchisee be required to execute to protect the lender's interest?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
the Franchise Agreement concerning such trademarks and intellectual property. Additionally, you will be required to execute a Security Agreement and Guarantee (in the forms attached to this Disclosure Document as part of Exhibit 3), financing statement and any other related documents as necessary or reasonable to protect and perfect the interest of us or our affiliate, as lender. The Note will bear interest from 0% to 7% per annum (or the maximum rate permitted by applicable law, whichever is less) and will have a term ranging from one to five years.
The following table summarizes the previous paragraph:
| Item Financed | Asset Purchase, Security Deposit, Initial Fees, Parts and Supplies |
|---|---|
| Initial Payment | At least $2,500 |
| Term (Yrs.) | 1 to 5 years |
| APR (%) | 0% to 7% (or the maximum rate permitted under applicable law, whichever is less) |
| Monthly Payment | Level payments based on an amount financed |
| Prepay Penalty | None, you may prepay all amounts owed without penalty |
| Security Required | Limited Personal Guaranty and perfected security interest in assets purchased under the Standard or Associate Programs. |
| Liability Upon Default | Accelerated balance, late fee equal to 5% of any overdue amount, termination of Franchise Agreement; |
Source: Item 10 — Financing (FDD pages 34–36)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, if you receive financing from Aerus or its affiliates, you will be required to execute several documents to protect their interests as the lender. These documents include a Security Agreement, a Guarantee, a financing statement, and any other related documents deemed necessary or reasonable by Aerus. The specific forms for the Security Agreement and Guarantee are included as part of Exhibit 3 in the Disclosure Document.
In addition to these documents, you will also be required to sign a secured promissory note, referred to as "the Note," if you finance any amount through Aerus. The Note is also included in Exhibit 3 of the Franchise Disclosure Document. The Note will be guaranteed by any principals of the Franchised Business.
The interest rate on the Note will range from 0% to 7% per annum, or the maximum rate permitted by applicable law, whichever is less, with a term of one to five years. The Note is governed by Texas law. Events of default under the Note include failure to pay amounts within 5 days of the due date; fraud or misrepresentation; theft or conversion of assets; misuse or infringement of intellectual property; bankruptcy or insolvency; default under any Franchise Agreement; and default under any agreement with Aerus or its affiliates.