Can an Aerus franchisee use a claim against the company as a defense against the enforcement of the confidentiality covenants?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
on, without compensation. Franchisee acknowledges that any such concept, process or improvement will become the property of Company and constitute Confidential Information, and Company may use or disclose such information in its discretion, including to other franchisees or developers.
- C. This Section 19 shall survive the expiration or termination of this Agreement. No claim Franchisee may have against Company, whether or not arising from this Agreement, shall constitute a defense to the enforcement by Company of the covenants provided for in this Section. Franchisee acknowledges that a violation of the terms of this Section would result in irreparable injury to Company for which no adequate remedy at law may be available, and, notwithstanding any general requirement to arbitrate disputes, Franchisee accordingly consents to the issuance of an injunction prohibiting any conduct by Franchisee in violation of the terms of this Section without the necessity of showing actual or threatened harm, likelihood of success on the merits of the claims and without being required to furnish a bond or other security. Franchisee agrees to pay all court costs and reasonable attorneys' fees incurred by Company in connection with the enforcement of this Section 19, including payment of all expenses for obtaining specific performance of, or an injunction against violation of, the requirements of this Section.
- D.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, a franchisee cannot use a claim against the company as a defense if Aerus tries to enforce the confidentiality agreements. Specifically, Section 19 of the franchise agreement remains in effect even after the agreement expires or is terminated.
Aerus emphasizes the importance of protecting its confidential information and specialized training provided to franchisees. To that end, the agreement specifies that any violation of the confidentiality terms would cause irreparable harm to Aerus, potentially leading to legal injunctions against the franchisee. This means Aerus can seek immediate court orders to stop any breach of confidentiality without having to prove actual harm or provide a financial bond.
Furthermore, if a franchisee violates the confidentiality agreements, Aerus can pursue legal action to recover court costs and reasonable attorney's fees. In addition to other available remedies, Aerus can also seek $5,000 per occurrence for breaches of these covenants, with the franchisee and their principals being jointly and severally liable for this amount. Aerus considers this amount a reasonable estimate of the damages it would incur due to such breaches.