What rights does the California Franchise Investment Law provide to Aerus franchisees?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
281, and the Federal Arbitration Act) to any provisions of a franchise agreement restricting venue to a forum outside the State of California.
The franchise agreement requires application of the laws of the State of Texas. This provision may not be enforceable under California law.
The maximum interest rate in California is 10% annually. We do not offer financing to California franchises.
Neither the Franchisor nor any person listed in Item 2 of this offering circular is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities Exchange Act of 1934, 15 U.S.C.A. 78a et seq., suspending or expelling such persons from membership in such association or exchange.
No disclaimer, questionnaire, clause, or statement signed by a franchisee in connection with the commencement of the franchise relationship shall be construed or interpreted as waiving any claim of fraud in the inducement, whether common law or statutory, or as disclaiming reliance on or the right to rely upon any statement made or information provided by any franchisor, broker or other person acting on behalf of the franchisor that was a material inducement to a franchisee's investment. This provision supersedes any other or inconsistent term of any document executed in connection with the franchise.
No statement, questionnaire, or acknowledgement signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, California law provides specific protections to franchisees. The franchise agreement stipulates that Texas law governs the agreement; however, the FDD states that this may not be enforceable under California law. This means a California Aerus franchisee may have the right to have California law apply to their franchise agreement, despite what the agreement says.
Additionally, any statement or agreement signed by an Aerus franchisee cannot waive claims of fraud in the inducement, whether based on common law or statute. Nor can these documents disclaim reliance on statements or information provided by Aerus or its representatives that were a material inducement to the franchisee's investment. This protects franchisees from unknowingly giving up their right to sue Aerus for misrepresentation.
Furthermore, franchisees cannot waive claims under any applicable state franchise law, including fraud in the inducement, or disclaim reliance on statements made by Aerus or its representatives. This provision supersedes any other conflicting terms in any document executed in connection with the franchise. Aerus's websites have not been reviewed or approved by the California Department of Financial Protection and Innovation, and any complaints about the website's content can be directed to that department.