Can an Aerus franchisee pre-pay their debt without penalty if they receive financing?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
from one to five years.
The following table summarizes the previous paragraph:
| Item Financed | Asset Purchase, Security Deposit, Initial Fees, Parts and Supplies |
|---|---|
| Initial Payment | At least $2,500 |
| Term (Yrs.) | 1 to 5 years |
| APR (%) | 0% to 7% (or the maximum rate permitted under applicable law, whichever is less) |
| Monthly Payment | Level payments based on an amount financed |
| Prepay Penalty | None, you may prepay all amounts owed without penalty |
| Security Required | Limited Personal Guaranty and perfected security interest in assets purchased under the Standard or Associate Programs. |
| Liability Upon Default | Accelerated balance, late fee equal to 5% of any overdue amount, termination of Franchise Agreement; interest, attorneys' fees and collection costs, foreclosure on secured assets |
| Loss of Legal Right On Default | Waive demand for payment, presentment, protest, notice of protest and non-payment, or other notice of de |
Source: Item 10 — Financing (FDD pages 34–36)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, franchisees are allowed to prepay their debt without incurring any penalties. This applies to financing offered by Aerus or its affiliates for initial fees, security deposits, accessories, parts and supplies, or the purchase of assets from an existing Aerus business.
This is a significant benefit for franchisees as it provides financial flexibility. If a franchisee's business performs well and they have extra capital, they can reduce their debt obligations early without penalty. This can save on interest payments and improve their overall financial health. The initial down payment required to receive financing from Aerus ranges from approximately $2,500 to $50,000, with the balance paid in equal monthly installments. The interest rate on the financed amount will range from 0% to 7% per annum (or the maximum rate permitted by applicable law, whichever is less) for a term of 1 to 5 years.
It is important to note that while prepayment is allowed without penalty, defaulting on payment obligations can lead to the termination of the Franchise Agreement. Additionally, Aerus requires a secured promissory note and a limited personal guaranty, along with a perfected security interest in the assets purchased under the Standard or Associate Programs. Upon default, the accelerated balance, a late fee equal to 5% of any overdue amount, interest, attorneys' fees, and collection costs may be applied, and foreclosure on secured assets may occur.