What financial assurance has the Maryland Securities Commissioner required based on Aerus's financial condition?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
Item 5 of the Disclosure Document is amended as follows:
Based upon the Franchisor's financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until the Franchisor completes its pre-opening obligations under the Franchise Agreement and the outlet is opened.
For Franchisees in Maryland, any initial fees will be deferred until the Franchisor has completed its pre-opening obligations and the outlet is opened.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, the Maryland Securities Commissioner has mandated a financial assurance due to Aerus's financial condition. This requirement means that all initial fees and payments owed by franchisees in Maryland are deferred. These fees and payments will not be collected until Aerus has fulfilled its pre-opening obligations as outlined in the Franchise Agreement, and the franchisee's outlet is officially opened for business.
This financial assurance measure protects prospective Aerus franchisees in Maryland by ensuring they do not pay initial fees until Aerus has met its obligations to prepare the franchisee to open. This reduces the franchisee's risk, as they are not investing in a business that may not be ready to operate. It also ensures that Aerus is incentivized to provide the necessary support and fulfill its pre-opening responsibilities promptly.
This type of requirement is not uncommon when a franchisor's financial stability is in question. By deferring the initial fees, the Maryland Securities Commissioner aims to mitigate potential losses for franchisees if Aerus were to face financial difficulties before the new franchise location is operational. Prospective franchisees in Maryland should carefully review the Franchise Agreement to understand the specific pre-opening obligations Aerus must complete before the initial fees become due.