Are the obligations undertaken by the franchisee in the Aerus franchise agreement jointly and severally undertaken by all of the franchisee's principals?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
14. Representations and Warranties.
A. Franchisee shall use its best efforts to operate the Franchised Business so as to achieve optimum sales in accordance with this Agreement.
B. If a business entity:
- (1) Franchisee is duly organized and validly existing under the law of the jurisdiction of its formation and is duly qualified and authorized to do business in each jurisdiction in which the Franchised Business will operate;
- (2) Franchisee's charter documents currently provide and will at all future times provide that Franchisee's activities shall be confined exclusively to the ownership and operation of an Aerus Business, unless Company otherwise consents in writing;
- (3) Franchisee has provided to Company for review certified copies of its articles of organization or other charter documents, any amendments thereto, resolutions of its Board of Directors or Board of Managers, or consent of its limited partners, authorizing and consenting to entry into and performance of this Agreement, and any certificates, buy-sell agreements or other documents restricting the sale or transfer of equity of the entity, and any other documents as Company may reasonably require prior to the execution of this Agreement;
- (4) The individual executing this Agreement is duly authorized to so execute, has appropriate authority to bind Franchisee as provided hereunder, and is an active, full-time participant in the daily operations of the Franchised Business; and
- (5) Franchisee's execution of this Agreement, and entry into the business arrangement contemplated hereby, do not violate any prior existing obligation, any law or any of the contractual or business relationship of Franchisee or any of Franchisee's principals.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
Based on the 2025 Aerus Franchise Disclosure Document, the document does not explicitly state that the obligations undertaken by the franchisee are jointly and severally undertaken by all of the franchisee's principals. However, the agreement does outline certain obligations and responsibilities of the franchisee, especially if the franchisee is a business entity.
Specifically, if the franchisee is a business entity, it must be duly organized and validly existing under the law of its formation and authorized to do business in each relevant jurisdiction. The franchisee's charter documents must confine its activities exclusively to the ownership and operation of an Aerus Business, unless the company consents otherwise in writing. The franchisee must also provide certified copies of its organizational documents, resolutions, and any agreements restricting equity sales to the company for review.
Furthermore, the individual executing the agreement on behalf of the franchisee must be duly authorized and an active, full-time participant in the daily operations of the franchised business. The franchisee's execution of the agreement must not violate any prior existing obligation, law, or contractual/business relationship of the franchisee or its principals. Since the FDD does not directly address joint and several liability, it is important that a prospective franchisee clarify with Aerus whether the principals of a franchisee entity will be held jointly and severally liable for the franchisee's obligations under the franchise agreement.