Does the Aerus Franchise Agreement specify what happens if a franchisee's Outlet Licensees violates any other agreement with the company?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
ncellation 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;
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to the 2025 Aerus Franchise Disclosure Document, the termination of the Franchise Agreement automatically terminates any licenses and agreements the franchisee has with Outlet Licensees.
Aerus may enforce the terms of the Franchise Agreement through methods like compliance audits and "secret shopper" practices. These systems can lead to penalties for violations, potentially including fines or the imposition of minimum royalty or sales requirements. The implementation and specifics of these enforcement systems are at Aerus's discretion and can be modified with reasonable notice to the franchisee.
Upon termination of the Franchise Agreement, the franchisee must notify all Outlet Licensees that their agreements are terminated and ensure they also cease using Aerus's trademarks. The franchisee is responsible for ensuring that their Outlet Licensees comply with these post-termination obligations.