Under what conditions might an Aerus franchisee be required to increase the Security Deposit?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
$20,000 under the Associate Program.
We or our affiliate will hold the Security Deposit as security against all monies that you owe us or our affiliates, including payment of all fees due and debts incurred under the Franchise Agreement (including your indemnification obligations). We or our affiliates may offset against the Security Deposit all monies that you owe to us or our affiliates. We will provide you notice of any offsets made. If such an offset is made, you must immediately replenish the Security Deposit. We have no obligation to maintain the Security Deposit in a separate account, and we may co-mingle the Security Deposit with any of our accounts or funds. You are not entitled to any interest on the Security Deposit. You may need to increase the Security Deposit from time to time depending on your inventory requirements for Consigned Products. If the Standard Allocation for any Consigned Product in your possession increases, you may be required to increase the amount of your Security Deposit.
Purchase of an Existing Aerus Business
| Inventory (Standard Program) | $15,000 to $90,000 | |---|---| | Inventory (Associate Program) | $5,000 to $20,000 | | Goodwill (Standard Program) | 0 to $200,000 | | Goodwill (Associate Program) | 0 to $25,000 | | Furniture, Fixtures, and Equipment (Standard | $2,500 to $15,000 | | Program) | | | Furniture, Fixtures, and Equipment (Associate | $2,000 to $5,000 | | Program) | | If you are purchasing an existing Aerus Business from our affiliate, you will also enter into an asset purchase agreement on mutually acceptable terms. You will pay to our affiliate the negotiated purchase price for the assets of the business you will be acquiring. Under the Standard Program the purchase price for business assets generally range from $2,500 to $215,000 which includes (1) goodwill, including any phone numbers and pre-paid advertisements ($0 to $200,000) and (2) fair market value of furniture, fixtures and equipment ($2,500 to $15,000).
Source: Item 5 — Initial Fees (FDD pages 17–20)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, an Aerus franchisee may be required to increase their Security Deposit under specific conditions related to inventory and financial obligations. Aerus, or its affiliates, hold the Security Deposit as security against any monies owed by the franchisee, including fees, debts, and indemnification obligations under the Franchise Agreement.
The FDD specifies that if Aerus offsets any amount from the Security Deposit due to franchisee debt, the franchisee must immediately replenish the Security Deposit to its original amount. This ensures that Aerus always has the full security amount available.
Furthermore, the franchisee may need to increase the Security Deposit if their inventory requirements for Consigned Products change. Specifically, if the Standard Allocation for any Consigned Product in the franchisee's possession increases, Aerus may require the franchisee to increase the amount of their Security Deposit. The amount of the Security Deposit will vary, depending upon what Consigned Products are in your inventory and the Standard Allocation for such Consigned Products. The Standard Allocation is based upon your sales volume and whether you participate in the Standard Program or the Associate Program. The estimated range for aftermarket and service parts and the Security Deposit for Consigned Products is $15,000 to $90,000 under the Standard Program and $5,000 to $20,000 under the Associate Program. This condition is directly tied to the franchisee's sales volume and program participation, reflecting the level of inventory they are expected to manage.
These provisions ensure that Aerus maintains adequate security against potential franchisee liabilities and inventory holdings, while also placing a responsibility on the franchisee to manage their inventory and financial obligations effectively.