Does the Aerus Franchise Agreement specify what happens if a franchisee violates any other agreement with the company?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
- C.
Termination, non-renewal or expiration of this Agreement shall not operate as a cancellation of any indebtedness owing to Company or Company's Affiliates by Franchisee at the time of such termination.
Company's failure in any instance to invoke a right to terminate shall not waive or otherwise limit its ability or right to properly terminate this Agreement thereafter.
Termination of this Agreement shall automatically terminate any and all licenses and agreements made by Franchisee with Sales Representatives.
- D.
Without limiting or restricting Company's right to terminate this Agreement at any time as provided herein, Company may implement a system of enforcement of the terms and provisions of this Agreement (including without limitation announced or unannounced compliance audits and "secret shopper" practices), which system may result in deferral of termination under certain circumstances and include any one or more of the following: (1) the imposition of fines or penalties associated with certain violations or breaches; (2) in the case of a royalty, impose a minimum or fixed amount to be paid in place of or in addition to the amount provided in Schedule 3 attached hereto; or (3) in the case of sales of the Products, impose the Minimum Sales Requirement set forth in Schedule 4 attached hereto.
The existence, substance and process of any such system would be the sole and exclusive discretion of Company and may be implemented, revoked or modified (upon reasonable notice to Franchisee) at any time and from time to time.
- E.
Upon expiration or termination of this Agreement, Franchisee and Franchisee's principals shall:
- (1) Immediately cease operation of the Franchised Business and any use of the Marks, Software and Administration Systems or the Customer Data for any reason or purpose; promptly remove all signs, markings, or other writings and, immediately discontinue all advertising or publicity, that tend to indicate that Franchisee is a franchisee of Company or seller of Products; and immediately discontinue all advertising or publicity and take all actions necessary to comply
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
The 2025 Aerus Franchise Disclosure Document addresses the company's right to enforce the terms of the agreement, which implicitly covers violations of other agreements. Specifically, Aerus retains the right to implement enforcement measures for breaches of the Franchise Agreement. These measures can include fines, penalties, or modifications to royalty or sales requirements. The implementation and specifics of such a system are at Aerus's discretion and can be modified with reasonable notice to the franchisee.
Additionally, the Aerus Franchise Agreement outlines actions Aerus can take upon termination of the agreement, which could result from violating other agreements. These actions include ceasing operation of the franchised business, discontinuing use of Aerus's trademarks, and terminating agreements with sales representatives. The franchisee must also cooperate with Aerus in transferring telephone numbers and assumed name filings, return company property, and pay outstanding debts.
Furthermore, the agreement includes non-compete clauses that restrict the franchisee's activities during the term of the agreement and for one year after termination. Violating these non-compete clauses would constitute a breach of the agreement, triggering enforcement measures. The agreement also states that termination does not cancel any outstanding debts to Aerus or its affiliates, meaning that financial obligations from other agreements would still be in effect even after the franchise agreement is terminated.
While the FDD does not explicitly state the consequences of violating 'any other agreement,' the broad enforcement powers and termination clauses provide Aerus with the means to address such violations. A prospective franchisee should seek clarification from Aerus regarding specific scenarios and the potential ramifications of violating other agreements with the company.