Can Aerus transfer the agreement to a lender as collateral?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
Assignment.
Franchisee shall not directly or indirectly Transfer or assign, nor attempt to Transfer or assign, this Agreement, or any right or obligation hereunder, without the prior written consent of Company; provided, that a principal or equity holder in Franchisee may be permitted to transfer an interest in Franchisee pursuant to the provisions set forth in Addendum C attached hereto.
Company shall be permitted to assign this Agreement at any time and from time to time; provided, however, no such assignment will be made by Company except to an assignee who, in Company's good faith judgment, is willing and able to assume Company's obligations under this Agreement.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, the company is permitted to assign the Franchise Agreement at any time. However, Aerus can only make this assignment to an assignee who, in Aerus's good faith judgment, is willing and able to assume Aerus's obligations under the agreement.
This clause provides Aerus with the flexibility to transfer its rights and obligations under the Franchise Agreement to another party, such as a financing entity or another company. However, it also includes a safeguard for the franchisee, ensuring that the assignee is capable of fulfilling Aerus's responsibilities.
For a prospective franchisee, this means that while Aerus can transfer the agreement, they must ensure the new party is a suitable replacement. It is fairly common practice in franchising to allow the franchisor to assign the agreement, as it allows the franchisor to obtain financing or sell the franchise system. However, franchisees should pay attention to the conditions attached to such assignments.