At what price should the Aerus consignee sell the consigned products?

According to Aerus's 2025 Franchise Disclosure Document, a consignee must sell consigned products at prices set by Aerus. Specifically, the consignee is obligated to sell the consigned products only in the ordinary course of business, adhering to the Franchise Agreement and any other instructions provided by Aerus. They must also provide only the manufacturer's warranties given with the consigned products.

This arrangement means that Aerus retains control over the pricing of its products even when they are sold through a consignee. This is intended to be a true consignment, where Aerus maintains full legal and equitable title to the consigned products at all times. The proceeds from the sale of these products are the property of Aerus and must be deposited into a designated trust account for the benefit of Aerus.

This setup protects Aerus's interests by ensuring consistent pricing and proper handling of revenue. It also places a responsibility on the consignee to manage the consigned products carefully, keeping them separate from other assets and maintaining accurate records. Furthermore, the consignee must carry insurance on the consigned products for their full replacement value, naming Aerus as the loss payee and co-insured.

Failure to adhere to these pricing and handling guidelines can result in the termination of the consignment agreement and may constitute an event of default under the broader Franchise Agreement. This arrangement is designed to give Aerus significant control over its products and revenue streams while distributing products through consignees.