Does the Aerus Franchise Agreement specify what happens if a franchisee violates any other agreement with the company's affiliates?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
cy Code, or any other United States federal or state bankruptcy, receivership or similar law; (c) Franchisee or any guarantor has appointed a receiver, trustee, conservator or a similar official; or (d) Franchisee or any guarantor makes a general assignment for the benefit its creditors.
- 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 Outlet Licensees and 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 with the foregoing, including instructing all publishers of any telephone directory or listing not to renew, repeat or insert any listing or advertisement using the word "
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, the agreement specifies that termination, non-renewal, or expiration of the Franchise Agreement does not cancel any debt the franchisee owes to Aerus or its affiliates. Additionally, Aerus retains the right to enforce the terms of the agreement, which may include fines or penalties for violations.
Aerus may also implement a system of enforcement that involves compliance audits and "secret shopper" practices, potentially leading to penalties or fines for breaches of the agreement. In cases involving royalties, Aerus can impose a minimum or fixed amount to be paid, and for product sales, they can enforce the Minimum Sales Requirement as outlined in Schedule 4. The implementation and modification of this enforcement system are at Aerus's discretion, with reasonable notice provided to the franchisee.
Furthermore, the FDD states that if a franchisee violates the terms and conditions of an addendum or the Franchise Agreement, Aerus can provide notice of termination. For example, the addendum regarding Beyond Products states that it will terminate if the franchisee violates the terms of the addendum or the Franchise Agreement. Upon termination of the addendum, the franchisee must cease offering Beyond Products, stop using Beyond Marks, and return all related personal property to Aerus and its affiliates.