Under what grounds can an Aerus franchisee terminate the franchise agreement?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
Company will identify any modifications or improvements to the premises of the Franchised Business, if any, which Franchisee shall make, at Franchisee's expense, prior to the Opening Date, or within such time period ending after the Opening Date as Company may designate in writing.
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- Term. Unless sooner terminated as provided herein, the duration of the initial term (the "Initial Term") and the renewal term (the "Renewal Term") will be as stated in Schedule 1 attached hereto, which, collectively, shall constitute the "Term" of this Agreement. Upon the expiration of the Initial Term, Franchisee may renew the franchise for one (1) Renewal Term, provided Company is then offering new franchise rights for the establishment of Aerus Businesses in the State where the franchise subject to renewal is located and provided Franchisee meets all of the following conditions: (1) Franchisee has no uncured Event of Default under the Agreement at the time of renewal; (2) Franchisee gives Company written notice of Franchisee's desire to renew at least thirty (30) days prior to the end of the Initial Term; (3) Franchisee has achieved ten thousand dollars ($10,000) or more in Gross Sales each month during the prior six (6) months; (4) Franchisee executes Company's then-current form of franchise agreement, which, upon execution, will supersede this Agreement and which may differ from the terms of this Agreement, including, without limitation, the payment of higher or additional fees and revised Minimum Sales Requirements; (5) Franchisee pays Company a renewal fee of one hundred dollars ($100) (in lieu of paying an initial franchisee fee); and (6) Franchisee and its principals and guarantors execute a general release, in a form satisfactory to Company, of any and all claims against Company and Company's current and former Affiliates, officers, directors, owners, employees, and agents. In the event the parties continue to perform under this Agreement after expirat
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, the franchise agreement continues for an Initial Term and a Renewal Term, as specified in Schedule 1. After the initial or renewal term concludes, if both parties continue performing without a new agreement, the agreement extends month-to-month. During this month-to-month extension, either Aerus or the franchisee can terminate the agreement with at least thirty days' written notice.
This means that an Aerus franchisee has limited options for terminating the agreement early, outside of the month-to-month extension scenario. The franchisee can only terminate the agreement if Aerus consents or if the franchisee has grounds to claim that Aerus has breached the agreement. Otherwise, the franchisee is bound to the full initial term of the agreement, and any renewal term if the franchisee elects to renew, unless they can negotiate an early exit with Aerus.
It is important for a prospective Aerus franchisee to understand the initial and renewal terms outlined in Schedule 1, as well as the conditions for renewal. If a franchisee wishes to end the agreement early but does not have grounds for a legal claim of breach, they would need to negotiate a termination with Aerus, which may involve penalties or other costs. The 30-day written notice is only applicable after the initial and any renewal terms have expired and the agreement is in a month-to-month extension.