Where should the proceeds from the sale of Aerus consigned products be paid?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Security Interest. To secure the due and punctual payment of all amounts due to Company for the proceeds arising from the sale or return to Company of the Consigned Products, Consignee hereby agrees that Company shall have, and hereby grants to and creates in favor of Company, a security interest in and to the Consigned Products and all proceeds thereof, as more fully-described on the Schedule of Collateral attached hereto (the "Collateral"). Consignee shall pay the cost of filing or recording this Agreement and any related financing statement in all public offices and the cost of all searches of records, wherever filing or recording or searching of records is deemed by Company to be necessary. At the request of Company, Consignee shall, from time to time, execute additional or supplemental documents and agreements to confirm Company's security interest in the Collateral.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, franchisees are required to remit payments from the sale or return of consigned products to Aerus Franchising, LLC. To secure these payments, Aerus retains a security interest in the consigned products and all proceeds derived from them. This arrangement ensures that Aerus maintains a primary claim over these assets, superseding any claims from the franchisee's other creditors.
To formalize this security interest, the franchisee must cover the costs associated with filing and recording the Consigned Products Security Agreement and any related financing statements in public offices. Additionally, franchisees are expected to execute supplementary documents or agreements as requested by Aerus to further confirm the company's security interest in the collateral.
This requirement protects Aerus's investment in the products supplied to the franchisee and ensures that Aerus is prioritized in receiving payment for those products. For a prospective franchisee, this means understanding the financial obligation to remit sales proceeds promptly and the legal implications of the security interest granted to Aerus.