When does Aerus recognize revenue from the sale of parts to franchisees?

According to Aerus's 2025 Franchise Disclosure Document, revenue from the sale of parts to franchisees is recognized upon shipment to the franchisees. This means that Aerus records the revenue as soon as the parts leave their facility and are en route to the franchisee, regardless of when the franchisee actually sells the parts to a customer.

This accounting practice has implications for franchisees. While Aerus recognizes the revenue immediately, the franchisee may not sell the parts right away. This can create a mismatch between the franchisee's cash flow and the franchisor's revenue recognition. Franchisees should be aware of this timing difference when managing their own finances and inventory.

In addition to parts, Aerus also sells machines to franchisees, but these are sold on a consignment basis. Revenue from machine sales is recognized only when the franchisee sells the inventory to the end customer. This is a different revenue recognition method than the one used for parts sales.