Under what condition is an Aerus debtor allowed to sell inventory?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company primarily sells its machines on a consignment basis to its franchisees. Revenue from sales through franchisees is recognized as the franchisees sell inventory.
- G.
Notwithstanding anything herein to the contrary, without Company's prior written approval, Franchisee shall not (1) conduct the Franchised Business under any actual or assumed name other than the Approved Name, (2) sell to any person or entity that is not an Approved Customer, (3) advertise, market or solicit sales outside of the Area of Responsibility, (4) sell to any person not residing within the Area of Responsibility, (5) conduct any aspect of the Franchised Business by, through, over or on the internet or world wide web, including without limitation, advertising, marketing and solicitation, unless or until Company establishes a Company sponsored program for such conduct by Franchisees and, then, only as part of and in accordance with such program, (6) use any trade name, trademark or service mark in connection with the Franchised Business other than the Marks (and then only in strict accordance with the terms and conditions of this Agreement, the Policies and Procedures, the Manuals and any specific guidelines imposed by Company), (7) advertise or sell any product or service from the Approved Location or through the Franchised Business bearing any trade name, trademark or service mark other than the Marks, (8) sell any product or service that is not a Product, or (9) permit any Product to be sold from any
physical location other than the Approved Location, by any Person other than an authorized representative of Franchisee or in a manner otherwise inconsistent with the System.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, Aerus Franchising LLC primarily sells its machines to franchisees on a consignment basis. This means that the franchisee does not purchase the inventory outright but holds it for sale on behalf of Aerus. The franchisee can sell inventory to approved customers residing within their area of responsibility, operating from the approved location.
However, there are specific restrictions on how and to whom franchisees can sell. Without Aerus's prior written approval, a franchisee cannot sell to any person or entity that is not an Approved Customer, advertise, market, or solicit sales outside of their designated Area of Responsibility, or sell to anyone not residing within that area. Additionally, franchisees are restricted from selling products over the internet unless Aerus establishes a company-sponsored program for online sales, and even then, sales must be conducted in accordance with the program.
These conditions ensure that Aerus maintains control over its brand and distribution channels, and that franchisees operate within defined territories and customer segments. For a prospective franchisee, this means understanding and adhering to these restrictions is crucial for compliance and successful operation of their Aerus franchise. Failure to comply with these conditions could result in penalties or termination of the franchise agreement.