Does the Aerus Franchise Agreement specify what happens if a franchisee's Sales Representatives violates any other agreement with the company?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
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
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 Sales Representatives. This means that if Aerus terminates its agreement with the franchisee, any agreements the franchisee has with their sales representatives are also terminated.
Additionally, Aerus may implement a system to enforce the terms of the Franchise Agreement, which could include fines or penalties for certain violations. This system could also defer termination under certain circumstances. The specifics of this enforcement system, including its implementation, revocation, or modification, are at Aerus's sole discretion, although Aerus will provide reasonable notice to the franchisee.
In practical terms, this means that Aerus franchisees need to ensure their Sales Representatives comply with all agreements. Failure to do so could lead to the termination of the franchisee's agreement with Aerus, which would also terminate the agreements with the Sales Representatives. Franchisees should seek clarification from Aerus regarding the specific enforcement system and potential penalties for violations to ensure full compliance.