What happens if the distributee of a deceased Aerus franchisee's interest is not approved by Aerus?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
- C. Upon Franchisee (if a natural person) or any Franchisee's principal's death, the executor, administrator or other personal representative of the deceased individual must Transfer such interest to a third party consented to by Company within twelve (12) months after the death. If no personal representative is designated or appointed or no probate proceedings are instituted with respect to the estate of the deceased individual, then the distributee of such interest must be consented to by Company. If the distributee is not consented to by Company, then the distributee must Transfer such interest to a third party consented to by Company within twelve (12) months after the death of the deceased individual.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, if the distributee of a deceased franchisee's interest is not approved by Aerus, the distributee must transfer the interest to a third party approved by Aerus within 12 months of the franchisee's death. This condition applies when no personal representative is designated, appointed, or probate proceedings are instituted for the deceased franchisee's estate.
This stipulation ensures that Aerus maintains control over who becomes a franchisee, even in the event of death. The 12-month period provides some flexibility for the deceased's estate to find a suitable buyer, but ultimately, Aerus has the final say in approving the new franchisee. This is a fairly standard practice in franchising, as franchisors want to ensure that new franchisees meet their operational and financial standards.
For a prospective Aerus franchisee, this means understanding that their business interest cannot automatically be passed on to just anyone. Heirs or beneficiaries must be approved by Aerus, or the business must be sold to an Aerus-approved third party. This could impact estate planning and should be discussed with legal and financial advisors to ensure the franchisee's wishes are carried out while also complying with the franchise agreement.