What legal rights does Aerus waive upon default of the financing agreement?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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 | Except in very limited circumstances, the inventory security deposit and initial franchise fee must be paid in cash and neither we nor an affiliate will finance the Security Deposit or the Initial Franch
Source: Item 10 — Financing (FDD pages 34–36)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, if a franchisee defaults on their financing agreement with Aerus, Aerus waives certain legal rights. Specifically, Aerus will 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.
In simpler terms, this means that Aerus gives up its right to formally demand immediate payment, to formally present the promissory note for payment, and to issue a formal protest if payment isn't made. Aerus also waives its right to notify the franchisee of any protests, defaults, acceleration of the debt, or intent to accelerate the debt.
This waiver of rights could potentially streamline the process Aerus uses to address defaults, possibly making it quicker and easier for them to take action. However, franchisees should be aware that while Aerus waives these specific notification rights, other penalties for default still apply, including an accelerated balance, a late fee of 5% of any overdue amount, termination of the Franchise Agreement, and liability for interest, attorneys' fees, collection costs, and foreclosure on secured assets.