If the Aerus franchisee is not a natural person, what must the franchisee obtain consent for?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
| Category | Section in Agreement | Summary |
|---|---|---|
| j. Assignment of | Section 20 | No restriction on right to transfer |
| contract by Franchisor | ||
| k. "Transfer" by | Section 20 and | Includes sale, assignment, grant, conveyance, pledge, |
| Franchisee-defined | Addendums A and C | hypothecation or encumbrance. |
| l. Franchisor approval of transfer by Franchisee | Addendum C | You must obtain our consent before transferring any interest in the Franchise Agreement, in the assets of the Franchised Business, or any ownership interest in the franchisee (if the franchisee is not a natural person). |
| m. Conditions for Franchisor approval of transfer | Addendum C | Conditions include, among others: You must pay a transfer fee. The transferee also must sign current Franchise Agreement or enter into written agreement assuming all of your obligations. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 56–60)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, if the franchisee is not a natural person, such as a corporation or LLC, the franchisee must obtain Aerus's consent before transferring any interest in the Franchise Agreement, the assets of the Franchised Business, or any ownership interest in the franchisee. This requirement ensures that Aerus maintains control over who is involved in the ownership and operation of its franchises, even when the franchisee is a business entity rather than an individual.
This provision is important for prospective Aerus franchisees because it means that if the franchise is owned by a company, any change in the ownership of that company (e.g., sale of stock, transfer of membership interests) requires approval from Aerus. This approval process allows Aerus to assess the qualifications and suitability of the new owners or stakeholders. The franchisor aims to protect its brand and ensure that all franchisees meet its standards.
It is common practice in franchising to have transfer provisions that require franchisor approval. This allows the franchisor to maintain consistency and quality across its franchise system. Aerus also has conditions for approval of transfer, including paying a transfer fee and the transferee signing the current Franchise Agreement or entering into a written agreement assuming all of the franchisee's obligations.