Under what condition regarding bankruptcy might the Aerus franchise agreement's termination provision not be enforceable?

According to Aerus's 2025 Franchise Disclosure Document, specifically the Virginia Addendum, a provision in the franchise agreement that allows Aerus to terminate the franchise upon the franchisee's bankruptcy may not be enforceable under federal bankruptcy law. This is because federal bankruptcy law (11 U.S.C. 101 et seq.) may override such termination clauses.

For a prospective Aerus franchisee in Virginia, this means that if they were to file for bankruptcy, Aerus's ability to terminate the franchise agreement solely based on the bankruptcy filing could be challenged in court. Federal bankruptcy law is designed to protect debtors, and certain provisions that allow for termination of contracts simply due to bankruptcy are often deemed unenforceable.

It is important for potential franchisees to understand that while the franchise agreement may contain certain clauses, these clauses are not always absolute and can be subject to federal and state laws. This addendum serves as a notification that the standard termination clause related to bankruptcy might not hold up in court due to federal law. Franchisees should consult with a legal professional to fully understand their rights and obligations in the event of bankruptcy.