If the Aerus franchisee defaults on the lease, what options does Aerus have?
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.
(2) If Franchisee, or any Affiliate of Franchisee, owns the Approved Location, sell or lease at market rents to Company the Franchisee's business premises including any building thereon, if applicable, for the fair market value of the land and building.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to the 2025 Aerus Franchise Disclosure Document, upon the expiration or termination of the franchise agreement, Aerus has specific options regarding the franchisee's business premises. If the Aerus franchisee operates the business from a location leased from a third party, Aerus has the option to request an assignment of the franchisee's interest in the lease or sublease for the approved location. This also applies to any lease for equipment used in the operation of the franchised business.
This provision allows Aerus to potentially maintain control over the location of a former franchise, which could be beneficial for continuing operations or establishing a new franchise in the same area. It also protects Aerus's interest in equipment leases related to the business.
If the Aerus franchisee or an affiliate owns the approved location, Aerus has the option to either purchase or lease the business premises, including any buildings on the property. The purchase or lease would be at fair market value or market rents, respectively. This ensures that the franchisee receives appropriate compensation for the property while giving Aerus the opportunity to retain the location for future use. This is a fairly standard clause in franchise agreements, as it protects the franchisor's interest in maintaining a presence in a particular market.