Under what condition does the Aerus agreement automatically terminate?

According to Aerus's 2025 Franchise Disclosure Document, the termination of the Franchise Agreement leads to the automatic termination of any licenses and agreements the franchisee has made with Outlet Licensees and Sales Representatives. This means that when the franchise agreement ends, all sub-agreements the franchisee has with their sales force also end immediately.

This provision ensures that upon termination of the franchise agreement, Aerus maintains control over its brand and distribution network. It prevents former franchisees from continuing to operate using the Aerus name or systems through pre-existing agreements with sales representatives or other licensees. The franchisee is responsible for notifying all Sales Representatives that their agreements are terminated and that they must also comply with the termination requirements.

For a prospective Aerus franchisee, this clause highlights the importance of understanding the terms of the franchise agreement and the potential consequences of termination. It also emphasizes the need to carefully manage relationships with Sales Representatives, as their agreements are directly tied to the status of the franchise agreement. Franchisees should be aware that any actions leading to the termination of their franchise will also impact their sales network.

This type of clause is relatively common in franchise agreements, as franchisors typically want to ensure a clean break upon termination and prevent any confusion or unauthorized use of their brand and systems. It is crucial for franchisees to fully understand their obligations upon termination to avoid potential legal issues or disputes with the franchisor or their former Sales Representatives.