Regarding the Aerus guarantee, is it a guarantee of payment or a guarantee of collection?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) This Guarantee is a guaranty of payment and not of collection.
Guarantor agrees that Lender need not attempt to collect any Guaranteed Obligations from Borrower, Guarantor or any other Obligor or to realize upon any collateral, but may require Guarantor to make immediate payment of all of the Guaranteed Obligations to Lender when due, whether by maturity, acceleration or otherwise, or at any time thereafter.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, the guarantee associated with their financing arrangements is a guarantee of payment, not a guarantee of collection. This distinction is significant for the guarantor, as Aerus (the Lender) is not obligated to first attempt to recover the debt from the borrower or any collateral before demanding payment from the guarantor. This means Aerus can seek immediate payment from the guarantor when the debt is due, regardless of whether attempts have been made to collect from the borrower.
This type of guarantee offers a strong level of protection to Aerus as the lender. It allows them to directly pursue the guarantor for the debt without needing to exhaust other recovery options. For the guarantor, this represents a higher level of risk, as they can be called upon to fulfill the debt obligations promptly.
In practical terms, a prospective Aerus franchisee acting as a guarantor should understand that this guarantee structure prioritizes Aerus's ability to recover funds quickly and efficiently. The guarantor should carefully assess the borrower's financial stability and ability to repay the debt, as the guarantor may be the first point of contact for repayment should the borrower default. This is a standard clause in financing agreements to protect the lender's interests.