factual

Is violating a law that affects the Aerus agreement grounds for immediate termination?

Aerus Franchise · 2025 FDD

Answer from 2025 FDD Document

  • B.

This Agreement may be terminated prior to the natural expiration of the Term upon the occurrence of any of the following events (which are each deemed material breaches or defaults of this Agreement):

  • (1) By Company immediately upon written notice to Franchisee, if: (a) Franchisee violates the license granted hereunder with respect to the Marks, the Software and Administration Systems, or the Customer Data, fails to satisfy any policy or procedure adopted by Company concerning the Marks, the Software and Administration Systems, or the Customer Data, or otherwise infringes Company's rights in or to the Marks, the Software and Administration Systems, or the Customer Data; (b) without Company's prior written approval, 10% of Franchisee's Gross Sales in any calendar quarter are attributed to sales made to persons or entities who reside or are located outside of the Area of Responsibility; (c) Franchisee sells any Product to any person or entity other than an Approved Customer; (d) Franchisee violates any obligation of confidentiality or non-disclosure provided for hereunder; (e) Franchisee or any principal of Franchisee attempts a Transfer in violation of this Agreement; (f) any heir or personal representative of Franchisee fails to Transfer the Franchised Business in accordance with Addendum C to this Agreement; (g) Franchisee violates any law, regulation, or ordinance, the violation of which affects this Agreement or the purposes hereunder; (h) Franchisee, or any of its principals or guarantors, is convicted of any felony or misdemeanor involving moral turpitude; (i) Franchisee or any of its Sales Representatives, employees, agents or representatives, makes any material misrepresentations or misstatements to, about or concerning Company or the Products; (j) Franchisee or any of its Sales Representatives, employees, agents or representatives, engages in any conduct that reflects materially and unfavorably upon the operation and reputation of Company or the Products; (k) Franchisee shall cease to do business; (l) Franchisee or any guarantor becomes insolvent; (m) any provisions of this Agreement concerning the protection of the Marks is determined in any manner to be null, void or unenforceable; (n) Franchisee fails, refuses or neglects to pay any monies owing to Company or Company's Affiliates when due under this Agreement or any other agreement or to submit to Company the financial or other information required by Company hereunder and does not cure such failure, refusal or neglect within five (5) business days following notice from Company; (o) if Franchisee or any of Franchisee's Sale Representatives violates or breaches any other provision of this Agreement or fails to satisfy any other of its non-monetary obligations hereunder, including but not limited to the Standards of Conduct set forth herein, and does not cure such violation, breach or failure within fifteen (15) days after receiving notification from Company of such violation, breach or failure; (p) Franchisee fails to meet the Minimum Sales Requirements for two (2) consecutive calendar quarters; (q) Franchisee or any of Franchisee's Sales Representatives, employees, agents or representatives is found to have offered, promoted, advertised or sold any Product by, through or on the Internet (except for any Company-created, Company-sponsored or Company-approved webpage);

Source: Item 23 — Receipts (FDD pages 74–305)

What This Means (2025 FDD)

According to Aerus's 2025 Franchise Disclosure Document, violating a law, regulation, or ordinance that affects the franchise agreement or its purposes can lead to immediate termination of the agreement. Aerus can terminate the agreement with written notice to the franchisee if such a violation occurs. This is considered a material breach of the agreement.

This provision means that franchisees must ensure they operate their Aerus business in full compliance with all applicable laws and regulations. This includes, but is not limited to, laws related to sales practices, consumer protection, environmental regulations, and labor laws. Failure to comply with these laws, if it affects the Aerus agreement or its objectives, provides grounds for Aerus to terminate the franchise agreement immediately.

For a prospective Aerus franchisee, this underscores the importance of understanding and adhering to all legal requirements relevant to their business operations. It also highlights the need to seek legal counsel to ensure compliance and to stay informed about any changes in laws or regulations that could impact the franchise. This immediate termination clause emphasizes the serious consequences of non-compliance and the potential risk to the franchisee's investment.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.