How much advance written notice is required for Aerus to terminate the consignment agreement?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
Event of Default; Termination.
This Agreement may be terminated by Company for any reason upon thirty days prior written notice, however, the security interest in the Collateral shall survive until payment in full has been made for products consigned from Company.
In addition, the following shall be "Events of Default" under this Agreement: (a) Consignee shall default under this Agreement or fail to perform or observe any of the agreements or covenants set forth in this Agreement or fail to pay when due any invoice or invoices covering products subject to this Agreement; (b) Consignee shall be declared to be in default under any material contract, agreement, or instrument to which Consignee is a party with Company or Aerus Franchising, or either of their affiliates or assigns, including without limitation the Franchise Agreement and documents incidental or related thereto, and such default shall continue beyond any applicable cure period; (c) Consignee shall sell, remove, or attempt to sell, remove, or assign Collateral not in the ordinary course of business; (d) any creditor of Consignee shall obtain possession of any Collateral by means including, without limitation, levy, distraint, replevin or self-help.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, the company can terminate the consignment agreement for any reason with thirty days prior written notice. However, the security interest in the collateral will remain until full payment has been made for the products consigned from Aerus.
Events of default include the consignee defaulting under the agreement, failing to perform or observe any agreements or covenants, or failing to pay invoices when due. Defaulting under any material contract with Aerus Franchising or its affiliates, selling or removing collateral outside the ordinary course of business, or a creditor obtaining possession of any collateral also constitute events of default.
This means that Aerus has the right to end the consignment agreement relatively quickly, which could impact a franchisee's ability to sell products. However, Aerus retains a security interest in the consigned products until they are fully paid for, protecting their investment. Franchisees should be aware of the conditions that trigger a default, as these could lead to termination of the consignment agreement.