Under what conditions is Aerus not required to replenish inventory or provide goods to 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)
Based on the 2025 Aerus Franchise Disclosure Document, Aerus is not obligated to replenish inventory under normal business operations. However, the franchisee is required to increase their security deposit for consigned products that remain in their inventory for 90 days or longer. Aerus will refund these increases to the security deposit once the franchisee provides satisfactory evidence of the sale of the consigned products.
This policy has implications for franchisees in terms of inventory management and cash flow. Franchisees need to effectively manage their inventory to avoid having products sitting for extended periods, which could tie up their funds in security deposits. This also incentivizes franchisees to actively sell and move their inventory to avoid the additional financial burden.
Unlike some franchise systems where the franchisor automatically replenishes inventory based on sales data, Aerus franchisees must proactively manage their stock and sales. This requires careful planning and sales strategies to ensure products are sold within the 90-day window to avoid the security deposit increase. Franchisees should consider this aspect when projecting their working capital needs and operational strategies.
While Aerus does not automatically replenish inventory, they do provide certain warranties on consigned products directly to the consumer. Franchisees are obligated to honor and provide service in connection with these warranties, which may require maintaining a service and repair center or having a contractual arrangement with another Aerus business for service and warranty obligations.