What happens to the security interest in the collateral after the Aerus consignment agreement is terminated?

According to Aerus's 2025 Franchise Disclosure Document, the security interest in the collateral will survive the termination of the consignment agreement until full payment has been made for the products consigned from Aerus. This means that even after the agreement ends, Aerus retains a legal claim on the consigned products and their proceeds until the franchisee has paid all outstanding amounts owed for those products.

This provision protects Aerus by ensuring that its financial interests in the consigned products are secured even if the consignment agreement is terminated. For a prospective franchisee, this means that termination of the agreement does not automatically release them from their financial obligations related to the consigned products. They remain responsible for paying the full amount owed for the consigned products, and Aerus can enforce its security interest to recover those amounts.

This type of security interest is a common practice in consignment agreements, as it provides the consignor (Aerus, in this case) with a way to mitigate the risk of non-payment by the consignee (the franchisee). It is important for a prospective Aerus franchisee to understand the implications of this security interest and to ensure that they have a plan for managing their inventory and payments to avoid potential disputes or enforcement actions by Aerus.