Is an Aerus franchisee allowed to participate in any business that competes with the Aerus system?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
6. Exclusivity and Non-Competition.
- A. During the Term, neither Franchisee, nor its Operating Principal, or any other owner, shall (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, (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, or (3) use any of the Customer Data for any reason other than operation of the Franchised Business. Further, the Approved Location may be used for the operation and conduct of the Franchised Business only and for no other use. Franchisee may not use the Marks in connection with any business or activities other than the Franchised Business. Company may in the future modify, expand or supplement the System or modify or add to the Products offered hereunder and Company or any of Company's Affiliates may in the future develop or offer new businesses or systems. In either event, if Company determines, in its reasonable discretion that any behavior of Franchisee previously not in violation of this Section later violates this Section, Company may require that Franchisee cease any such behavior upon written notice to Franchisee.
- 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 16 — Restrictions on What the Franchisee May Sell (FDD pages 54–56)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, franchisees face restrictions on engaging in competitive businesses both during and after the franchise term. During the term of the agreement, the franchisee, its operating principal, or any other owner is prohibited from promoting or selling products or services similar to Aerus's products, participating in any business that competes with the Aerus system, or using customer data for any reason other than operating the franchised business. The approved location must be used solely for the Aerus business. Aerus retains the right to modify or expand the system and its products.
After the agreement expires or terminates, or if the franchisee transfers their interest, a non-compete clause takes effect for one year. During this period, the franchisee and its operating principal are restricted from promoting or selling similar products or participating in competitive businesses within the Area of Responsibility or within a ten-mile radius of any existing or under-construction Aerus business. This restriction applies to businesses that compete with the Aerus system or its products, including any businesses developed by Aerus or its affiliates.
These non-compete terms are common in franchising to protect the brand and system. The agreement specifies that the duration of the non-compete period will be extended for any time the franchisee is in breach of these covenants or if Aerus seeks to enforce the agreement. This ensures Aerus's interests are protected even if legal disputes arise. Franchisees should carefully consider these restrictions and how they might impact their future business activities before entering into an agreement with Aerus.