Upon termination of the Aerus franchise agreement, does the franchisee still owe any outstanding debt to Aerus or its affiliates?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
- C.
Termination, non-renewal or expiration of this Agreement shall not operate as a cancellation of any indebtedness owing to Company or Company's Affiliates by Franchisee at the time of such termination.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, the termination, non-renewal, or expiration of the Franchise Agreement does not cancel any outstanding debt the franchisee owes to Aerus or its affiliates at the time of termination. This means that even after the franchise agreement ends, the franchisee remains responsible for paying off any existing financial obligations to Aerus.
This provision is significant for prospective franchisees as it clarifies that termination of the franchise agreement does not absolve them of their financial responsibilities. Franchisees should ensure they understand the full extent of their financial obligations and have a plan to manage and pay off any debts, even if the franchise is terminated. This could include outstanding loan payments, unpaid royalties, or any other financial obligations incurred during the term of the franchise agreement.
It is common in franchising for franchisees to remain liable for outstanding debts even after termination. This clause protects Aerus's financial interests and ensures that franchisees cannot avoid their financial obligations by simply terminating the agreement. Franchisees should carefully review the terms of the franchise agreement and seek legal and financial advice to fully understand their obligations and potential liabilities.