What is the potential impact of the California Franchise Investment Law on the Aerus franchise agreement?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
281, and the Federal Arbitration Act) to any provisions of a franchise agreement restricting venue to a forum outside the State of California.
The franchise agreement requires application of the laws of the State of Texas. This provision may not be enforceable under California law.
The maximum interest rate in California is 10% annually. We do not offer financing to California franchises.
Neither the Franchisor nor any person listed in Item 2 of this offering circular is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities Exchange Act of 1934, 15 U.S.C.A. 78a et seq., suspending or expelling such persons from membership in such association or exchange.
No disclaimer, questionnaire, clause, or statement signed by a franchisee in connection with the commencement of the franchise relationship shall be construed or interpreted as waiving any claim of fraud in the inducement, whether common law or statutory, or as disclaiming reliance on or the right to rely upon any statement made or information provided by any franchisor, broker or other person acting on behalf of the franchisor that was a material inducement to a franchisee's investment.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to the 2025 Aerus Franchise Disclosure Document, the franchise agreement stipulates that the laws of Texas govern the agreement. However, this may not be enforceable under California law. This means that certain provisions of the Aerus franchise agreement that are valid in Texas might be challenged or deemed unenforceable in California courts if they conflict with California franchise laws.
Additionally, the FDD states that no disclaimer, questionnaire, clause, or statement signed by a franchisee can be interpreted as waiving any claim of fraud in the inducement or disclaiming reliance on statements made by Aerus. This provision supersedes any other conflicting terms in any document executed in connection with the franchise. This is a protective measure for franchisees, ensuring they retain their rights to pursue claims of fraud, regardless of any agreements they may have signed.
Furthermore, the Aerus FDD indicates that the company's websites have not been reviewed or approved by the California Department of Financial Protection and Innovation. Any complaints regarding the website's content can be directed to the California Department of Financial Protection and Innovation. This disclosure serves as a warning to potential franchisees in California that the state agency has not vetted the online information provided by Aerus, and any issues should be reported to the appropriate authorities.