FDD Items 3 & 4 · 2026 filing
Aerus litigation history
What Aerus disclosed about lawsuits, arbitrations and bankruptcy in the 2026 Franchise Disclosure Document. Item 3 lists the material legal actions a franchisor must report; Item 4 covers bankruptcy. This is the franchisor's own disclosure, not a court record, and not legal advice.
Items 3 & 4 at a glance
What the filing discloses
- Cases disclosed
- 2
- Item 3, as counted in the filing
- Largest disclosed settlement
- $350K
- As stated in Item 3
- Bankruptcy (Item 4)
- None
- Franchisor, parent, predecessor or officer
- Filing year
- 2026
- Disclosures cover the prior ten years
Extracted from the 2026 Franchise Disclosure Document
Item 3: litigation
One completed case (EnviroPro v. Aerus affiliates, settled 2019 for $350,000 paid by affiliate) and one recently settled arbitration against a former franchisee (Aerus Franchising v. Avacs, LLC & Joe Ardito, filed Feb 2025, settled Nov 2025) for post-term obligations/trademark infringement.
Disclosure signals that moved the score
How this shows up in the verdict
- Going Concern status is FALSE: Red flag suggesting franchisor financial instability or accounting irregularities that undermine system viability
- Active litigation with franchisees: Pending 2025 arbitration by franchisor against former franchisee over post-term obligations suggests disputes over contract enforcement and exit terms
- Historical trademark/contract disputes: 2019 settled lawsuit involving breach of contract and trademark violation indicates systemic relationship conflicts with channel partners
The verdict grade is FranchiseVerdict's editorial assessment across SBA loan performance, unit growth, revenue and disclosure signals. It is not investment advice.
Before you weigh a lawsuit
How to read Item 3
A franchisor must disclose pending actions and any material civil action involving the franchise relationship, plus convictions or civil judgments for fraud, unfair or deceptive practices, or franchise-law violations, going back ten years. A case the franchisor brought against a franchisee counts too. Item 3 does not include every dispute: settled claims below the materiality line and matters resolved in private arbitration can be absent.
Questions worth asking current and former franchisees, using the contact list in Item 20:
- Were you, or anyone you know in the system, party to a dispute with the franchisor?
- Was it resolved by settlement, arbitration or a court, and on what terms?
- Has the number of disputes gone up or down since you signed?