What happens if an Aerus franchisee defaults under their payment obligations?
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, several consequences may arise if a franchisee defaults on their payment obligations. Aerus, or its affiliates, may offer financing for initial fees, security deposits, accessories, parts and supplies, and the purchase of assets from an existing Aerus business. If financing is provided, the franchisee will sign a secured promissory note. If a franchisee defaults on their payment obligations under this note, Aerus has the right to terminate the Franchise Agreement.
Events that constitute default under the promissory note include failing to make payments within 5 days of the due date, engaging in fraud or misrepresentation related to the Franchise Agreement or the note, theft or conversion of Aerus's assets (including selling consigned products below required prices), misusing Aerus's intellectual property, bankruptcy or insolvency of the franchisee or their guarantors, defaulting under any Franchise Agreement with Aerus, and defaulting under any agreement with Aerus or its affiliates beyond any grace period provided.
The table provided in the FDD outlines the liabilities upon default, which include accelerating the outstanding balance, imposing a late fee equal to 5% of the overdue amount, terminating the Franchise Agreement, and responsibility for interest, attorneys' fees, collection costs, and foreclosure on secured assets. Additionally, upon default, the franchisee waives certain legal rights, such as the right to demand payment, presentment, protest, notice of protest and non-payment, notice of acceleration, and any other notice.