Is Aerus liable under the lease before it is assigned to or assumed by Aerus?

According to Aerus's 2025 Franchise Disclosure Document, Aerus is not liable under the lease agreement until it is formally assigned to or assumed by Aerus. This protection is explicitly outlined in the Lease Rider that is part of the franchise agreement. The Lease Rider clarifies that Aerus is not considered a party to the lease between the franchisee (Tenant) and the landlord and, therefore, has no obligations or liabilities until Aerus takes on the lease through assignment or assumption. This arrangement is designed to protect Aerus from being responsible for the franchisee's lease obligations unless Aerus chooses to step in.

This provision is beneficial for prospective Aerus franchisees as it limits Aerus's liability regarding the lease. The franchisee is solely responsible for the lease terms and payments until Aerus decides to assume the lease, which typically happens if the franchisee defaults or the franchise agreement is terminated. This setup allows franchisees to manage their business location with the understanding that Aerus's involvement is contingent on specific circumstances.

However, it's important to note that Aerus has the option to cure a default and assume the lease if the franchisee fails to meet their obligations. If Aerus chooses to do so, they must notify the landlord within thirty days of receiving notice of the default and then proceed to cure the default within a reasonable timeframe. Once Aerus assumes the lease, they become the tenant, and the original franchisee no longer has any rights under the lease. This clause provides Aerus with a mechanism to maintain control over the business location if the franchisee is unable to continue operations.

Furthermore, the Lease Rider specifies that the tenant (franchisee) can assign the lease to Aerus or one of its affiliates upon the expiration or termination of the Franchise Agreement. The landlord consents to this assignment and agrees not to impose any assignment fees or accelerate rent payments. The landlord also acknowledges that they will look solely to the tenant for any rents or financial obligations owed before the assignment. This arrangement facilitates a smooth transition of the lease to Aerus if needed, without additional financial burdens or complications.