Does Aerus require franchisees to purchase or lease specific items for their Franchised Business?

rough changes in the Manuals.

Required Purchases

You must purchase or lease, install and maintain all of the Products, Product parts and components, fixtures, furnishings, equipment (including electronic cash register, or computer hardware and software and administration systems and satellite communications systems), décor items, signs, uniforms and related items that we prescribe in the Manuals or otherwise in writing, which will be made available to you prior to signing the Franchise Agreement. You must obtain our written consent prior to installing or permitting to be installed any fixtures, furnishings, equipment, decor items, signs, games, vending machines or other items not previously authorized by us. We will promptly furnish to you, on your written request, our then-current standards and specifications applicable to any equipment, supplies, or other products we require, to the extent the standards and specifications do not constitute our trade secrets.

Approved and Designated Suppliers

We have the right to require you to purchase certain approved products and services from us, our affiliates, or other suppliers or providers approved or designated by us, including, for example, Products and other inventory items and supplies, payment processing services, advertising materials, stationery and other printed materials, Product repair equipment, computer hardware and software, electronic cash register and point of sale systems, consumer financing services, approved location décor and signage, and other goods or services necessary to operate a Franchised Business. We and/or our affiliates are presently the designated supplier of Consigned Products and other Products, Product components and parts, related accessories, and approved proprietary computer hardware and software programs. Except for certain of our officers' ownership interests in us and our affiliates, our officers do not have an ownership interest in any of our approved or designated suppliers. We derive, and our affiliates may derive, revenue as a result of required purchases or leases by franchisees. Neither we nor any of our affiliates receive rebates from third parties as result of required purchases or leases by franchisees.

During our fiscal year ended December 31, 2024, we realized approximately $14.41 million of revenue from required purchases and leases by franchisees, primarily consisting of franchisee purchases of Consigned Products and service and aftermarket parts and accessories. This revenue accounted for approximately 91% of our total revenue of approximately $15.83 million in 2024. Our affiliates did not derive any revenue from purchases and leases by franchisees during the fiscal year ending December 31, 2024.

We estimate that required purchases and leases will account for up to 90% of all of your purchases and leases necessary to open a Franchised Business, and up to 80% of your ongoing costs to operate a Franchised Business.

We do not have any purchasing or distribution cooperatives. While we do not presently do so, we may in the future negotiate purchasing arrangements with suppliers of approved and designated goods and services. We do not provide any material benefits such as renewal rights or additional franchises to you if you buy from sources we approve.

Consigned Products and Related Warranties

Most of the Products in your inventory will be Consigned Products which we or our affiliates own. Before the consummation of a sale with an Approved Customer, we or our affiliate, as applicable, will sell the Consigned Product to you for resale to the Approved Customer.

Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 29–33)