What happens if an Aerus franchisee fails to satisfy and achieve the Minimum Sales Requirement?

According to Aerus's 2025 Franchise Disclosure Document, if a franchisee fails to meet the Minimum Sales Requirement, Aerus has the right to terminate the Franchise Agreement. The FDD also clarifies that these minimum sales requirements should not be interpreted as a guarantee of potential earnings, and Aerus makes no assurances that a franchisee will achieve them. This policy applies to both the Standard and Associate programs.

For a prospective Aerus franchisee, this means that failing to meet the minimum sales requirements can have serious consequences, including the termination of their franchise agreement. It is crucial to understand how these minimums are calculated and what factors might affect a franchisee's ability to meet them. The minimum sales requirements for both the Standard and Associate programs have two components: Core Unit sales and "Aftermarket, labor, and parts".

For the Standard Program, the Core Units component is the greater of (i) 45 Core Units per quarter per Approved Location (excluding Licensed Outlets and Satellites) or (ii) the average quarterly Core Unit sales volume for the Franchised Business since the Approved Location first became part of a franchised business. The Aftermarket, labor, and parts component is 80% of the average Gross Sales per Approved Location of aftermarket, labor and parts for all Approved Locations in the System for each quarter, excluding Satellites and Licensed Outlets. For the Associate Program, the Core Units component is 30 Core Unit sales per quarter, and the Aftermarket, labor, and parts component is 80% of the average Gross Sales per Approved Location of aftermarket, labor and parts for all Approved Locations in the System for each quarter, unless the franchisee is not required to maintain a service and repair center.

Given the potential for termination due to unmet sales requirements, prospective franchisees should carefully evaluate their market, business plan, and financial projections to assess their ability to meet these minimums. They should also seek clarification from Aerus regarding the specific calculations and any factors that could influence these requirements. Understanding these obligations is essential for mitigating the risk of potential franchise termination.