After the Aerus franchise agreement expires or terminates, for how long is the franchisee prohibited from engaging in competitive activities?
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
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, a franchisee is restricted from competitive activities for one year after the franchise agreement expires, terminates, or the franchisee transfers their interest in the agreement. This non-compete clause applies to both the franchisee and their Operating Principal.
The restriction applies within the franchisee's Area of Responsibility or within a 10-mile radius of any Aerus business that exists or is under construction at the time of expiration, termination, or transfer. During this period, the franchisee is prohibited from promoting or selling products or services similar to Aerus's products, or participating in any business that competes with Aerus's system, products, or any of Aerus's or its affiliates' existing or future businesses.
It's important to note that the one-year period can be extended if the franchisee breaches the non-compete covenants or if Aerus seeks to enforce the agreement. This means that any violation of the non-compete terms could result in a longer period of restriction. This non-compete agreement survives the termination or expiration of the franchise agreement, ensuring that these restrictions remain in place even after the formal agreement has ended.