Can Aerus offset monies owed from the franchisee against the security deposit?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall pay to Company all fees, payments and deposits set forth in Schedule 3 attached hereto and required elsewhere in this Agreement (the remittance of each, a "Payment") in the amounts, at the time, and in the manner described in this Agreement or the Policies and Procedures or elsewhere in the Manuals. Each Payment to be made to Company must be made free and clear at the time, and in the manner, specified in this Agreement, without deduction or offset. TIME IS OF THE ESSENCE with respect to all Payments to be made. All unpaid obligations under this Agreement will bear interest from the date due until the date of receipt by Company, at one and one-half percent (1.5%) per month, or the maximum rate allowed by applicable law, whichever is less.
- A. At Company's option, Company may withdraw funds from Franchisee's designated bank account by electronic funds transfer or comparable method in the amount of any Payment or any other amounts due hereunder to Company and for all subsequent payments due to Company, as further described in the Manuals or otherwise in writing. Franchisee shall at all times maintain in its designated bank account a minimum balance in the amount specified in the Manuals.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to the 2025 Aerus Franchise Disclosure Document, franchisees are required to pay all fees, payments, and deposits as outlined in Schedule 3 of the agreement. These payments must be made without any deduction or offset. This means that the franchisee cannot deduct any amounts they believe they are owed from the payments due to Aerus. Time is of the essence regarding these payments, and any unpaid obligations will accrue interest at a rate of 1.5% per month, or the maximum rate allowed by law, whichever is less.
Aerus has the option to withdraw funds from the franchisee's designated bank account through electronic funds transfer for any payments or amounts due. The franchisee must maintain a minimum balance in this account as specified in the manuals. This ensures that Aerus can collect payments efficiently and promptly.
This arrangement is fairly standard in franchising, as franchisors need to ensure timely payments to maintain their own financial stability and provide ongoing support to the franchise system. The strict payment terms and the ability for Aerus to directly withdraw funds from the franchisee's account highlight the importance of franchisees managing their finances carefully and ensuring they have sufficient funds available to meet their obligations.