What is the fixed amount a franchisee and their principals must pay Aerus per occurrence for breaching the covenants in Section 19 of the Aerus Franchise Agreement?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
other security. Franchisee agrees to pay all court costs and reasonable attorneys' fees incurred by Company in connection with the enforcement of this Section 19, including payment of all expenses for obtaining specific performance of, or an injunction against violation of, the requirements of this Section.
- D. For breach of the covenants in this Section 19, which are made in consideration of the specialized training and Confidential Information described above, and due to the difficulty of establishing the precise amount of damages for breach of these covenants, in addition to the other remedies provided for in this Agreement or otherwise available to Company, Franchisee and Franchisee's principals who committed such breach jointly and severally agree to pay Company the amount of Five Thousand Dollars ($5,000) per occurrence.8 The parties agree that the foregoing amount is a reasonable estimation of the damages that would be incurred by Company for breach of the covenants provided for in this Section.
- 19. Assignment. Franchisee shall not directly or indirectly Transfer or assign, nor attempt to Transfer or assign, this Agreement, or any right or obligation hereunder, without the prior written consent of Company; provided, that a prin
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, franchisees and their principals must jointly and severally pay Aerus $5,000 per occurrence for breaching the covenants in Section 19 of the Franchise Agreement. This payment is in addition to any other remedies available to Aerus. Aerus states that this amount is a reasonable estimation of the damages they would incur due to a breach of these covenants. These covenants are made in consideration of the specialized training and confidential information provided to the franchisee.
Section 19 of the Aerus Franchise Agreement addresses assignment restrictions. It states that franchisees cannot directly or indirectly transfer or assign the agreement without prior written consent from Aerus. However, a principal or equity holder in the franchise may be permitted to transfer an interest in the franchisee under specific provisions outlined in Addendum C.
This clause highlights the importance Aerus places on protecting its interests and confidential information. The fixed payment serves as a deterrent against breaches of the agreement and provides Aerus with a predictable form of compensation in the event of a violation. However, the FDD also notes that this liquidated damages clause does not apply to franchises in the State of Minnesota or the State of North Dakota.