What interest rate range will the Note bear for an Aerus franchise?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
from one to five years.
The following table summarizes the previous paragraph:
| Item Financed | Asset Purchase, Security Deposit, Initial Fees, Parts and Supplies |
|---|---|
| Initial Payment | At least $2,500 |
| Term (Yrs.) | 1 to 5 years |
| APR (%) | 0% to 7% (or the maximum rate permitted under applicable law, whichever is less) |
| Monthly Payment | Level payments based on an amount financed |
| Prepay Penalty | None, you may prepay all amounts owed without penalty |
| Security Required | Limited Personal Guaranty and perfected security interest in assets purchased under the Standard or Associate Programs. |
| Liability Upon Default | Accelerated balance, late fee equal to 5% of any overdue amount, termination of Franchise Agreement; interest, attorneys' fees and collection costs, foreclosure on secured assets |
| Loss of Legal Right On Default | Waive demand for payment, presentment, protest, notice of protest and non-payment, or other notice of de |
Source: Item 10 — Financing (FDD pages 34–36)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, if Aerus or its affiliates offer financing, franchisees will be required to sign a secured promissory note, referred to as "the Note." The interest rate on this Note will range from 0% to 7% per annum, or the maximum rate permitted by applicable law, whichever is less. The term for repayment will range from one to five years.
This means that a prospective Aerus franchisee who receives financing from Aerus could potentially have a very low or even zero-interest loan, which is a significant benefit. However, the actual interest rate will depend on factors such as the franchisee's creditworthiness and the performance of the Aerus business, as measured by product sales and goodwill associated with the location. The franchisee should be aware that the rate could also be influenced by state laws regarding maximum permissible interest rates.
It is also important to note that the debt may be prepaid without penalty, giving the franchisee flexibility in managing their finances. However, defaulting on payment obligations can lead to the termination of the Franchise Agreement. The Note is secured by a limited personal guaranty and a perfected security interest in the assets purchased under the Standard or Associate Programs. Upon default, the balance is accelerated, and a late fee equal to 5% of any overdue amount may be charged, in addition to interest, attorneys' fees, and collection costs.