What is an Aerus franchisee required to do prior to opening the franchised business regarding consigned products?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
- D.
Prior to the opening of the Franchised Business, Franchisee shall make an initial order of Consigned Products for an initial inventory and shall post with Company the appropriate Security Deposit.
Franchisee may order additional Consigned Products, in its discretion in a manner described in the Manuals; provided that Franchisee may be required to increase the amount of the Security Deposit in accordance with applicable provisions of Schedule 3, attached hereto.
Company need not replenish such inventory, or provide any other goods to Franchisee under this Agreement during any time in which Franchisee is delinquent in any payment to Company or any of Company's Affiliates, is in breach of this Agreement or does not have on deposit with Company a sufficient Security Deposit to support the order requested.
Franchisee must promptly pay all shipping and handling charges incurred in connection with the above.
Franchisee shall at all times maintain such inventory levels as may be designated in the Manuals.
Company may offset against the Security Deposit at any time during the Term or following termination or expiration of this Agreement all monies owing from Franchisee to Company or Company's Affiliates and immediately upon Franchisee's receipt
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, a new franchisee must make an initial order of Consigned Products for an initial inventory before opening their franchised business. Additionally, the franchisee is required to post an appropriate Security Deposit with Aerus. The amount of the security deposit may need to be increased as the franchisee orders additional Consigned Products.
Aerus may not replenish the franchisee's inventory if the franchisee is delinquent in payments, in breach of the agreement, or does not have a sufficient Security Deposit to cover the order. The franchisee is also responsible for promptly paying all shipping and handling charges associated with the consigned products.
Maintaining the inventory levels designated in the manuals is a continuous requirement for the franchisee. Aerus retains the right to offset any monies owed by the franchisee against the Security Deposit during the term of the agreement or after termination or expiration.