If the Aerus Franchise Agreement is terminated by Aerus, what action must Aerus take regarding the Landlord?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
- F.
Upon expiration or termination of this Agreement, Franchisee shall do any one or more of the following, at Company's option:
- (1) If Franchisee operates the Franchised Business premises under a lease with a third party or, with respect to any lease for equipment used in the operation of the Franchised Business, assign to Company any interest which Franchisee has in any lease or sublease for the Approved Location or any equipment related to the Franchised Business.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
The 2025 Aerus Franchise Disclosure Document (FDD) outlines specific actions the franchisee must take regarding the leased location upon termination of the agreement, but it does not specify any actions Aerus must take regarding the landlord. According to the FDD, if the franchisee operates the franchised business from a leased location, Aerus has the option to have the franchisee assign any interest in the lease or sublease to Aerus. This means that upon termination, Aerus can choose to take over the franchisee's lease agreement.
This provision protects Aerus by allowing them to maintain control over key locations and continue operations seamlessly if a franchise agreement is terminated. For a prospective franchisee, this means that upon termination, they may be required to transfer their lease to Aerus, potentially losing their investment in leasehold improvements and the location itself. It is important to note that this action is at Aerus's option, not a mandatory requirement.
While the FDD details the franchisee's obligations regarding the lease, it does not specify any direct communication or action that Aerus must take with the landlord. A prospective franchisee should clarify with Aerus what role, if any, Aerus takes in communicating with the landlord upon termination of the agreement, especially regarding outstanding obligations or the transfer of the lease. Understanding this process is crucial for managing expectations and potential liabilities upon termination.