What is the significance of 'TIME IS OF THE ESSENCE' regarding payments to Aerus?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall pay to Company all fees, payments and deposits set forth in Schedule 3 attached hereto and required elsewhere in this Agreement (the remittance of each, a "Payment") in the amounts, at the time, and in the manner described in this Agreement or the Policies and Procedures or elsewhere in the Manuals. Each Payment to be made to Company must be made free and clear at the time, and in the manner, specified in this Agreement, without deduction or offset. TIME IS OF THE ESSENCE with respect to all Payments to be made. All unpaid obligations under this Agreement will bear interest from the date due until the date of receipt by Company, at one and one-half percent (1.5%) per month, or the maximum rate allowed by applicable law, whichever is less.
- A. At Company's option, Company may withdraw funds from Franchisee's designated bank account by electronic funds transfer or comparable method in the amount of any Payment or any other amounts due hereunder to Company and for all subsequent payments due to Company, as further described in the Manuals or otherwise in writing. Franchisee shall at all times maintain in its designated bank account a minimum balance in the amount specified in the Manuals.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, the phrase 'TIME IS OF THE ESSENCE' regarding payments emphasizes the critical importance of making payments on time. For an Aerus franchisee, this means that strict adherence to the payment schedule outlined in the Franchise Agreement and related documents is required. Failing to make payments on time can lead to significant repercussions.
Specifically, Aerus charges interest on all unpaid obligations starting from the due date until the date the company receives the payment. The interest rate is 1.5% per month, or the maximum rate allowed by applicable law, whichever is less. This late payment penalty can quickly increase the amount owed to Aerus, adding a financial burden on the franchisee.
Furthermore, Aerus has the option to withdraw funds directly from the franchisee's designated bank account through electronic funds transfer for any Payment or other amounts due. Franchisees must maintain a minimum balance in their designated bank account as specified in the manuals to cover these potential withdrawals. Therefore, franchisees need to manage their cash flow carefully to ensure timely payments and avoid penalties or fund withdrawals by Aerus.