What is the interest rate applied to unpaid obligations to Aerus?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall pay to Company all fees, payments and deposits set forth in Schedule 3 attached hereto and required elsewhere in this Agreement (the remittance of each, a "Payment") in the amounts, at the time, and in the manner described in this Agreement or the Policies and Procedures or elsewhere in the Manuals. Each Payment to be made to Company must be made free and clear at the time, and in the manner, specified in this Agreement, without deduction or offset. TIME IS OF THE ESSENCE with respect to all Payments to be made. All unpaid obligations under this Agreement will bear interest from the date due until the date of receipt by Company, at one and one-half percent (1.5%) per month, or the maximum rate allowed by applicable law, whichever is less.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, unpaid obligations to Aerus accrue interest from the date they are due until Aerus receives payment. The interest rate is 1.5% per month, or the maximum rate allowed by applicable law, whichever is less.
This means that if a franchisee fails to make a payment on time, Aerus can charge interest on the outstanding balance. The 1.5% monthly interest rate equates to an annual interest rate of 18%, which is relatively high. However, Aerus specifies that the interest rate will be capped at the maximum rate allowed by law if that rate is lower than 1.5% per month. This protects the franchisee from being charged an illegally high interest rate.
Prospective franchisees should be aware of this interest rate and make every effort to pay their obligations to Aerus on time to avoid incurring these charges. It would be prudent to clarify with Aerus what the maximum interest rate allowed by applicable law is in their specific jurisdiction to fully understand the potential cost of late payments.