Under what circumstances might an Aerus franchisee be required to increase the amount of their Security Deposit?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type Of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Standard Allocation | As established by us in the Manuals or otherwise in writing. Amount will vary depending upon your sales volume. | Promptly upon sale. | You must remit to us or our Affiliate the Standard Allocation for the Consigned Products sold. You may be required to pay to us or our Affiliate, the full Standard Allocation, as if a sale had occurred for any Consigned Products held in your inventory for 90 days or longer. |
| Security Deposit | 88% of the Standard Allocation for all Consigned Products held in your inventory. Amount will vary depending upon Consigned Products held in inventory and your sales volume. | On demand. | You may be required to increase the amount of your Security Deposit in the event the Consigned Products held in your inventory increases or in the event the Standard Allocation for such Consigned Products increases. |
Source: Item 6 — Other Fees (FDD pages 20–27)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, a franchisee may need to increase their security deposit under specific circumstances related to consigned products. The security deposit is initially set at 88% of the Standard Allocation for all Consigned Products held in the franchisee's inventory. The amount of the security deposit will fluctuate depending on the quantity of Consigned Products held in inventory and the franchisee's sales volume.
Specifically, Aerus may require a franchisee to increase the amount of their Security Deposit if the quantity of Consigned Products held in their inventory increases. This means that if a franchisee stocks more products, the security deposit must be adjusted accordingly to maintain the 88% coverage.
Additionally, Aerus may also require an increase in the security deposit if the Standard Allocation for the Consigned Products increases. The Standard Allocation is determined by Aerus and can vary depending on sales volume. If Aerus raises the Standard Allocation, the franchisee's security deposit must be increased to reflect the higher value of the consigned products held in inventory. This ensures that the security deposit remains adequate to cover Aerus's investment in the consigned products held by the franchisee.