Under what conditions can Aerus require the transfer of a franchisee's interest due to permanent disability?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
- D. Upon the permanent disability of Franchisee (if a natural person) or any principal of Franchisee, Company may, at Company's sole option, require the interest of such individual to be transferred to a third party in accordance with the conditions described in this Addendum within six (6) months after notice to Franchisee. Permanent disability will be determined by a licensed practicing physician Company selects, upon examination of the person; or if the person refuses to submit to an examination, then such person automatically will be deemed permanently disabled as of the date of such refusal for the purpose of this Addendum.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, if a franchisee (or a principal of the franchisee) becomes permanently disabled, Aerus has the option to require the transfer of that individual's interest to a third party. Aerus must provide notice to the franchisee, and the transfer must occur within six months of this notice.
The determination of permanent disability is made by a licensed physician selected by Aerus, who will examine the individual in question. If the individual refuses to undergo this examination, they will automatically be deemed permanently disabled from the date of refusal for the purposes of the franchise agreement.
This clause protects Aerus by ensuring that the franchise can continue to operate effectively even if the franchisee or a key principal becomes unable to manage the business due to a disability. For a prospective franchisee, this means understanding that a sudden disability could lead to the forced transfer of their business interest, potentially impacting their investment and future income. It is important to consider disability insurance and succession planning to mitigate this risk.