What is the interplay between the initial fees for an Aerus franchise in Item 5 and the potential financing options available in Item 10?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
In certain circumstances, we may reduce initial fees and finance initial fees for our existing franchisees, people working for our existing franchisees and franchisees opening or operating multiple locations. Last year, the initial fees ranged from approximately $5,000 to $16,000.
Except as described above, initial fees are uniformly imposed and nonrefundable and we do not offer financing for the initial franchise fees.
Item 10
FINANCING
We are not obligated to offer financing to any franchisee. However, we or our affiliates may offer financing for (i) initial fees, (ii) Security Deposit, (iii) accessories, parts and supplies purchased from us or our affiliate, and (iv) the purchase of the assets of any existing Aerus Business that you may be acquiring from us or one of our affiliates. The amount financed and the terms of the financing will vary, based upon, among other things, the performance of the Aerus Business as measured by the number of Products sold, the goodwill associated with the location and your creditworthiness.
We anticipate that you will make an initial down payment ranging from approximately $2,500 to $50,000. The balance will be paid in equal monthly installments until paid in full or as we or our affiliates may otherwise determine. The debt may be pre-paid without penalty. If you default under your payment obligations, we may terminate the Franchise Agreement. If you finance any amount, you must sign a secured promissory note ("the Note") in the form attached to this Disclosure Document as part of Exhibit 3. The Note will be guaranteed by any principals of the
If you are purchasing an existing Aerus Business from our affiliate, you will also enter into an asset purchase agreement on mutually acceptable terms. You will pay to our affiliate the negotiated purchase price for the assets of the business you will be acquiring. Under the Standard Program the purchase price for business assets generally range from $2,500 to $215,000 which includes (1) goodwill, including any phone numbers and pre-paid advertisements ($0 to $200,000) and (2) fair market value of furniture, fixtures and equipment ($2,500 to $15,000). Under the Associate Program the purchase price for business assets generally range from $2,000 to $30,000 which includes (1) goodwill, including any phone numbers and pre-paid advertisements ($0 to $25,000) and (2) fair market value of furniture, fixtures and equipment ($2,000 to $5,000). The value of goodwill depends on such factors as the geographic location of the Aerus Business, the amount of time the Aerus Business has existed in its general location and the number of customers serviced by the Aerus Business.
| 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 default, notice of acceleration and intention to accelerate or any other notice |
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, the initial fees, which ranged from approximately $5,000 to $16,000 last year, may be financed by Aerus or its affiliates under certain conditions. While Aerus is not obligated to offer financing to any franchisee, they may provide financing for initial fees, security deposits, accessories, parts and supplies purchased from them or their affiliate, and the purchase of assets of an existing Aerus Business.
The availability and terms of financing depend on factors such as the performance of the Aerus Business, the goodwill associated with the location, and the franchisee's creditworthiness. Aerus anticipates an initial down payment ranging from approximately $2,500 to $50,000, with the balance paid in monthly installments. The debt can be prepaid without penalty. If a franchisee defaults on their payment obligations, Aerus may terminate the Franchise Agreement.
If Aerus provides financing, the franchisee must sign a secured promissory note, which will be guaranteed by the principals of the company. The interest rate can range from 0% to 7% APR, with the term lasting from 1 to 5 years. In addition to financing the initial franchise fee, Aerus may also finance the purchase of an existing Aerus business, with asset purchase prices ranging from $2,500 to $215,000 for the Standard Program and $2,000 to $30,000 for the Associate Program, including goodwill and the fair market value of furniture, fixtures, and equipment.