Under what conditions is Aerus not required to replenish inventory for the franchisee?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition to the foregoing, Franchisee shall from time to time during the term of this Agreement, at Company's request, pay to Company as an increase to the Security Deposit, an amount equal to the Standard Allocation of all Consigned Products which remain in Franchisee's
inventory for ninety (90) days or longer. Company will refund such increases to the Security Deposit within thirty (30) days after Franchisee provides evidence satisfactory to Company confirming the sale of such Consigned Products in accordance with the terms of this Agreement.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, Aerus franchisees are required to pay an increase to their security deposit for consigned products that remain in their inventory for 90 days or longer. However, Aerus will refund these increases to the security deposit within 30 days after the franchisee provides satisfactory evidence of the sale of these consigned products, in accordance with the terms of the agreement.
This arrangement functions as a way for Aerus to ensure that franchisees are actively selling the consigned products and not holding onto inventory for extended periods. By requiring an increase to the security deposit for aged inventory, Aerus incentivizes franchisees to manage their stock effectively and promote sales. The refund mechanism provides a way for franchisees to recover their deposit increase once they successfully sell the products.
For a prospective Aerus franchisee, this means that managing inventory and sales is crucial. If products remain unsold for more than 90 days, the franchisee will need to increase their security deposit, which could impact their available capital. However, by actively marketing and selling the products, the franchisee can avoid this situation and receive a refund of the deposit increase once the products are sold. This policy encourages franchisees to focus on sales and efficient inventory management, which are essential for the success of their Aerus business.