Are there any deadlines associated with the initial fees for an Aerus franchise (Item 5) that are dependent on the franchisee's pre-opening obligations (Item 11)?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
th Deposit and Initial Franchise Fee
We may require that you pay us a good faith deposit of $100, together with delivering to us a commitment letter, a sample of which is attached as Exhibit 7 to this Disclosure Document, before we will send an execution copy of the Franchise Agreement to you. The requirement of the $100 good faith deposit is dependent upon information disclosed to us in your application, such as work history, credit worthiness, previous franchise experience, references and/or previous work history with us or other Aerus franchisees. If we require the good faith deposit, it will be applied to the initial franchise fee and is only refundable if we choose not to enter into the Franchise Agreement with you.
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, the initial franchise fee is due at the time of signing the Franchise Agreement. Item 5 states that the franchisee must pay the non-refundable initial franchise fee when signing the Franchise Agreement, and the amount varies depending on the type of franchise. Additionally, Aerus may require a $100 good faith deposit along with a commitment letter before sending an execution copy of the Franchise Agreement. This deposit, if required, is dependent on information disclosed in the application, such as work history and credit worthiness. The good faith deposit is applied to the initial franchise fee and is refundable only if Aerus chooses not to enter into the Franchise Agreement.
Item 11 outlines pre-opening obligations, including providing a copy of the manuals, identifying necessary premises modifications, providing an initial inventory upon order and security deposit, and selling or subleasing existing business assets if applicable. While these obligations are necessary before opening, they do not appear to directly affect the deadline for paying the initial franchise fee. The initial franchise fee is due upon signing the agreement, regardless of how quickly or slowly the franchisee fulfills the pre-opening obligations.
However, the "Opening Date" is defined in Item 23 as the date on or prior to which the franchisee must open the Franchised Business to the public, and this date is specified in Schedule 1 of the Franchise Agreement. Item 11 states that the Operating Principal and General Manager must successfully complete initial training to Aerus's satisfaction before the Opening Date, but in no event later than 6 months after signing the Franchise Agreement. Failure to complete this training gives Aerus the right to terminate the Franchise Agreement. While the initial fee is non-refundable, failure to meet the training requirement could lead to termination of the agreement, effectively making the initial fee unrecoverable if the business cannot open. Therefore, while there is no direct deadline extension for the initial fee based on pre-opening obligations, failing to meet certain obligations like training can jeopardize the franchise agreement and the initial investment.