Does Aerus require franchisees to provide a security deposit?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
following termination or expiration of this Agreement all monies owing from Franchisee to Company or Company's Affiliates and immediately upon Franchisee's receipt of notice of such offset during the Term, Franchisee shall replenish the Security Deposit by an amount equal to such offset. Company need not maintain the Security Deposit in a separate account, and Company may co-mingle the Security Deposit with any of Company's accounts or funds. Franchisee will not be entitled to any interest on the Security Deposit. In addition to the foregoing, Franchisee shall from time to time during the term of this Agreement, at Company's request, pay to Company as an increase to the Security Deposit, an amount equal to the Standard Allocation of all Consigned Products which remain in Franchisee's inventory for ninety (90) days or longer. Company will refund such increases to the Security Deposit within thirty (30) days after Franchisee provides evidence satisfactory to Company confirming the sale of such Consigned Products in accordance with the terms of this Agreement.
E.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to the 2025 Aerus Franchise Disclosure Document, Aerus franchisees are required to pay a security deposit. The standard terms state that Aerus need not maintain the security deposit in a separate account and may co-mingle it with other company funds. The franchisee will not be entitled to any interest on the security deposit.
During the term of the agreement, Aerus may request an increase to the security deposit, which will be equal to the standard allocation of all consigned products remaining in the franchisee's inventory for 90 days or longer. Aerus will refund these increases within 30 days after the franchisee provides satisfactory evidence of the sale of the consigned products.
However, the Illinois Addendum to the disclosure document states that Illinois franchisees must pay a security deposit equal to 88% of the total allocation of consigned products and service parts that the franchisee is required to buy and maintain during the franchise term. If the required allocation of inventory increases, the security deposit will also increase. This addendum also clarifies that the consigned products and parts are owned by Aerus and some of its affiliates.