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D70/100FDD 2025

Aerus — Litigation & Risk

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Moderate — Review

2 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
2
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
70 / 100
FranchiseVerdict composite
Rating
CAUTION
STRONG / MODERATE / CAUTION / AVOID

7(a) FOIA data · FY2020–present

SBA Loan Performance

Aggregated from public SBA 7(a) loan disclosures. Default rate is the share of loans that were charged off or settled for less than the full balance.

Total 7(a) loans
6
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted

FDD Items 5, 6 & 17 — what you give up

Contract Risk Indicators

Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
1 yrs
Post-termination restriction on similar businesses
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
No
Franchisor can match any purchase offer when you try to sell
Governing law
Texas
State whose law governs disputes — relevant if you're not based there

What drove the 70/100 rating

Risk Score Breakdown

  1. 01MINORSystem declining sharply: 166 units down 17.3% YoY indicates contracting franchisee base and potential market saturation or performance issues
  2. 02MINORNo financial disclosure (Item 19): Franchisor refuses to disclose average unit revenue and net income, making ROI completely opaque and preventing informed investment decisions
  3. 03HIGHGoing Concern status is FALSE: Red flag suggesting franchisor financial instability or accounting irregularities that undermine system viability
  4. 04HIGHActive litigation with franchisees: Pending 2025 arbitration by franchisor against former franchisee over post-term obligations suggests disputes over contract enforcement and exit terms
  5. 05MINORHistorical trademark/contract disputes: 2019 settled lawsuit involving breach of contract and trademark violation indicates systemic relationship conflicts with channel partners
  6. 06MINORExtremely short 1-year term: Unusual franchise term length provides minimal business stability, high renewal uncertainty, and extreme dependency on franchisor goodwill
  7. 07MEDHigh royalty burden at 8% with no performance data: Without disclosed earnings, franchisees cannot verify royalty sustainability relative to actual profitability
  8. 08MEDWide investment range ($16K–$417K) with no guidance: Massive variance suggests inconsistent unit economics, unclear startup costs, or undisclosed territory/support variables

Severity inferred from FDD text — not a regulatory or legal classification

Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice — consult a franchise attorney before signing any franchise agreement.