After the Aerus franchise agreement expires or terminates, for how long am I restricted from competing with Aerus?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. For a period of one (1) year after the expiration or termination of this Agreement or the transfer of all of Franchisee's interest in this Agreement, neither Franchisee, nor its Operating Principal, shall, within the Area of Responsibility or within a ten (10)-mile radius of any Aerus Business in existence or under construction as of the expiration or termination of this Agreement or the transfer of all of Franchisee's interest in this Agreement, (1) promote the sale of, or sell, directly or indirectly, any products or services that are similar in nature to, or that are substitutes for, the Products, or (2) undertake or participate in any business or activity that is competitive in nature with the System or any of the Products, or with Company's, or any of Company's Affiliates', now existing or hereafter developed businesses or systems. Franchisee agrees that the length of time in this Section 6(B) will be tolled for any period during which Franchisee is in breach of the covenants set forth in this Section 6(B) or any other period during which Company seeks to enforce this Agreement
- C. This Section 6 shall survive the expiration or termination of this Agreement. No claim Franchisee may have against Company, whether or not arising from this Agreement, shall
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, franchisees face a one-year non-compete obligation following the termination or expiration of their franchise agreement or the transfer of their interest in the agreement. This restriction applies to both the franchisee and their Operating Principal.
During this one-year period, franchisees are prohibited from promoting or selling products or services similar to Aerus's products, or engaging in any business activities that compete with the Aerus system or its products. This restriction is limited to the franchisee's Area of Responsibility and within a ten-mile radius of any existing or under-construction Aerus business at the time of termination, expiration, or transfer.
The FDD specifies that the length of the non-compete period can be extended if the franchisee breaches the non-compete covenants, or if Aerus has to take legal action to enforce the agreement. This means the one-year clock could be paused, giving Aerus additional time to enforce the non-compete if necessary. This non-compete clause survives the termination or expiration of the agreement, meaning that even after the franchise relationship ends, the franchisee is still bound by these restrictions.
This type of non-compete agreement is common in franchising to protect the brand and the existing franchisees in the system. Prospective Aerus franchisees should carefully consider the implications of this restriction, especially if they plan to remain in the same geographic area and industry after leaving the Aerus system. It is advisable to seek legal counsel to fully understand the scope and enforceability of the non-compete agreement.