From whom must an Aerus franchisee obtain Consigned Products?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
WHEREAS, Consignee and Company ("Aerus Franchising") have entered into the Franchise Agreement, which agreement governs the operations by Consignee of a franchised business engaged in, among other things, the sale of certain consigned products and other related products and services as permitted by, and more particularly described in, the Franchise Agreement;
NOW, THEREFORE, for and in consideration of the premises and promises set forth herein and in the Franchise Agreement, and other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, Company and Consignee agree as follows:
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- Consignment Arrangement. Company has consigned or agrees to consign to Consignee, and Consignee agrees to receive on consignment from the Company, the Consigned Products for sale, at Company's listed retail prices. This is intended to be a true consignment and Company shall at all times retain the full legal and equitable title to the Consigned Products. This Agreement is entered into as a precautionary measure to insure that Company's rights to the Consigned Products shall be first and prior to all other creditors of Consignee under all circumstances.
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- Security Interest. To secure the due and punctual payment of all amounts due to Company for the proceeds arising from the sale or return to Company of the Consigned Products, Consignee hereby agrees that Company shall have, and hereby grants to and creates in favor of Company, a security interest in and to the Consigned Products and all proceeds thereof, as more fully-described on the Schedule of Collateral attached hereto (the "Collateral"). Consignee shall pay the cost of filing or recording this Agreement and any related financing statement in all public offices and the cost of all searches of records, wherever filing or recording or searching of records is deemed by Company to be necessary. At the request of Company, Consignee shall, from time to time, execute additional or supplemental documents and agreements to confirm Company's security interest in the Collateral.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, Consigned Products are provided to the franchisee directly from Aerus Franchising or its affiliates. The agreement between Aerus Franchising and the franchisee, referred to as the Consignee, governs the operation of the franchised business, including the sale of consigned products. Aerus retains full legal and equitable title to these Consigned Products.
The arrangement is structured as a consignment, meaning Aerus retains ownership of the products until they are sold. This agreement ensures Aerus's rights to the Consigned Products are prioritized over other potential creditors of the franchisee. The franchisee is obligated to receive these products on consignment for sale at the retail prices listed by Aerus.
To further secure the arrangement, the franchisee grants Aerus a security interest in the Consigned Products and all proceeds from their sale. This security interest is detailed in the Schedule of Collateral. The franchisee is responsible for covering the costs associated with filing or recording the agreement and any related financing statements, as well as the costs of any necessary record searches. Aerus may also request the franchisee to execute additional documents to confirm Aerus's security interest in the collateral.