Can Aerus impose fines or penalties for violations or breaches of the franchise agreement?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
Without limiting or restricting Company's right to terminate this Agreement at any time as provided herein, Company may implement a system of enforcement of the terms and provisions of this Agreement (including without limitation announced or unannounced compliance audits and "secret shopper" practices), which system may result in deferral of termination under certain circumstances and include any one or more of the following: (1) the imposition of fines or penalties associated with certain violations or breaches; (2) in the case of a royalty, impose a minimum or fixed amount to be paid in place of or in addition to the amount provided in Schedule 3 attached hereto; or (3) in the case of sales of the Products, impose the Minimum Sales Requirement set forth in Schedule 4 attached hereto.
The existence, substance and process of any such system would be the sole and exclusive discretion of Company and may be implemented, revoked or modified (upon reasonable notice to Franchisee) at any time and from time to time.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, Aerus has the right to enforce the terms and provisions of the franchise agreement, which may include imposing fines or penalties for certain violations or breaches. Aerus may conduct compliance audits, announced or unannounced, and use "secret shopper" practices to ensure compliance.
This enforcement system is at Aerus's sole discretion and can be implemented, revoked, or modified with reasonable notice to the franchisee. Besides fines and penalties, the enforcement system may also involve setting a minimum or fixed royalty amount or imposing a Minimum Sales Requirement.
This means that as an Aerus franchisee, you could be subject to fines or other penalties if you violate the franchise agreement. The specific violations that could trigger these penalties, and the amounts of the fines, are not detailed in this section, but Aerus retains the right to modify this system. It is important for a prospective franchisee to understand the potential financial implications of non-compliance and to inquire about the specific details of the enforcement system during the due diligence process.