Does Section 19 of the Aerus Franchise Agreement survive the expiration or termination of the agreement?

According to Aerus's 2025 Franchise Disclosure Document, Section 6 of the Franchise Agreement, which pertains to exclusivity and non-competition, survives the expiration or termination of the agreement. Specifically, Section 6 outlines restrictions on the franchisee's activities both during the term of the agreement and for a period of one year after its expiration or termination.

During the term, the franchisee is prohibited from promoting or selling products or services similar to Aerus's, participating in competitive businesses, or using customer data for purposes other than operating the franchised business. After the agreement ends, the franchisee and its operating principal are restricted for one year from engaging in similar competitive activities within the Area of Responsibility or a 10-mile radius of any Aerus business.

This survival clause means that even after the franchise agreement ends, the franchisee remains bound by certain obligations, particularly concerning competition and confidentiality. This is a common practice in franchising to protect the franchisor's brand, customer base, and trade secrets. The agreement also specifies that the one-year restriction period will be extended by any time the franchisee is in breach of these covenants or while Aerus is seeking to enforce the agreement.

Prospective Aerus franchisees should carefully consider these post-termination restrictions, as they could impact their ability to pursue other business ventures after leaving the Aerus system. It is important to understand the scope of the non-compete obligations and how they might affect future opportunities.