What is the 'Fixed Rate' referring to in the context of the Aerus Secured Promissory Note?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
ckey, President | | | Date of Execution: | | | FRANCHISEE: | | | , | | | a | | | By: | | | Name: | | | Date of Execution: | | | OPERATING PRINCIPAL: | | | , | | | | | | Individually as Operating Principal | | | Date of Execution: |
EXHIBIT 3
SECURED PROMISSORY NOTE, SECURITY AGREEMENT, GUARANTEE
SECURED PROMISSORY NOTE
| $ |
|---|
| As of, |
| Dallas, Texas |
| FOR VALUE RECEIVED, the undersigned,, a |
| ("Maker"), hereby [jointly, severally and] unconditionally promises to pay to the order of AERUS |
| FRANCHISING, LLC, a Delaware limited liability company ("Payee"), at 14841 Dallas Parkway, |
| Suite 500, Dallas, Texas 75254, or such other address as the holder hereof may, from time to time, |
| designate in writing, the principal sum of AND/100 DOLLARS |
| ($), in lawful money of the United States of America, together with interest on the |
| unpaid principal balance from day-to-day remaining, computed from the date of advance until |
| maturity at a rate per annum equal to percent (%) (the "Fixed Rate"). |
| Reference |
| is |
| hereby |
| made |
| to |
| that |
| certain |
| Franchise |
| Agreement |
| dated |
| by and between Maker and Payee ("Franchise Agreement"). |
| For purposes of calculating interest accrued hereon at the Fixed Rate, interest on this Note |
| shall be calculated on the basis of the actual days elapsed over a 360-day year. |
| Principal and accrued interest on this Note, computed as aforesaid, shall be due and payable |
| as follows: |
| (i) in equal monthly installments, each in the amount of |
| Dollars ($), commencing on, and continuing thereafter on |
| the first (1st) day of each succeeding calendar month, and (ii) in one final installment on |
| , 20, in the amount of the unpaid principal balance and accrued and unpaid |
| interest on |
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, the 'Fixed Rate' in the Secured Promissory Note refers to the annual interest rate that the Maker (franchisee) promises to pay to Aerus Franchising, LLC (Payee) on the unpaid principal balance. This rate is a fixed percentage, as specified in the note, and is used to calculate the interest accrued from the date of advance until maturity.
The interest on the Secured Promissory Note is calculated based on the actual days elapsed over a 360-day year. The principal and accrued interest are typically due in equal monthly installments, commencing on a specified date, with a final installment due on a later date, including any unpaid principal and accrued interest.
If a monthly payment is not received by Aerus within ten days of the due date, the Maker will incur a late charge of five percent (5%) of the payment amount. Furthermore, after an Event of Default, the past due principal and interest will bear interest at a rate equal to the lesser of the Maximum Rate or five percent (5%) in excess of the Fixed Rate. This means that the cost of borrowing could increase significantly if the franchisee fails to meet their payment obligations or defaults on the note.