In the event of a dispute with Aerus, what is the maximum amount of liability Aerus will have?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
| Category | Section in Agreement | Summary |
|---|---|---|
| the System or any of the Products, or with our, or any of our affiliates', now existing or future developed businesses or systems. | ||
| r. Non-competition covenants after the franchise is terminated or expires | Section 6 and 15.E | For a 1-year period following termination, expiration or transfer of the franchise (or transfer of an ownership interest in the franchise entity, as applicable) you and your principals may not: promote the sale of, or sell, directly or indirectly, any floor care, air or water products or other products and services which are similar in nature to, or which are competitive substitutes for, the Products and may not undertake or participate in any business or activity which is competitive in nature with the System or any of the Products, or with our, or any of our affiliates', now existing or future developed businesses or systems. |
| s. Modification of the | Section 21 | Franchise Agreement may not be modified unless |
| Agreement | mutually agreed to in writing and signed by both parties. | |
| t. Integration/merger clause | Section 21.A | The Franchise Agreement, together with the Manuals, constitutes the entire agreement and understanding of the parties. Only the terms of the Franchise Agreement are binding (subject to state law). Any representations or promises made outside the Disclosure Document and Franchise Agreement may not be enforceable. No claim made in any Franchise Agreement is intended to disclaim the express representations made in this Franchise Disclosure Document. |
| u. Dispute resolution by arbitration or mediation | Sections 3, 6, 16 and 19 | Except as otherwise provided in the case of injunctive relief, all disputes must be arbitrated before litigation may be brought. We will not be liable in an amount greater than the Standard Allocation paid during the prior 6 months. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 56–60)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, in the event of a dispute that proceeds to arbitration, Aerus's liability is capped. Specifically, Aerus will not be liable for any amount greater than the Standard Allocation paid by the franchisee during the six months prior to the dispute. This limitation on liability is a significant factor for prospective franchisees to consider. It means that regardless of the damages a franchisee might claim in a dispute, Aerus's financial responsibility is limited to the amount of the Standard Allocation paid over the previous six months.
This provision impacts the potential financial recovery a franchisee could receive in a dispute resolution process. It effectively sets a ceiling on the damages that can be claimed from Aerus, regardless of the actual losses incurred by the franchisee. Franchisees should carefully evaluate this limitation, especially in relation to their potential investment and anticipated revenue.
It is important to note that this liability limitation is tied to the Standard Allocation, which is a specific payment made by the franchisee. The actual amount of this allocation, and therefore the liability cap, can vary. Prospective franchisees should seek clarification from Aerus regarding the typical Standard Allocation amounts and how they are determined to fully understand the potential financial implications of this dispute resolution clause.