What administrative fee must I pay to Aplus if, as an individual developer, I transfer my interest to a Business Entity for convenience?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
on of these facilities (which you acknowledge may be proximate to any Store developed under this Agreement).
- 8.2. Transfer by Individual Developer to Business Entity for Convenience. If you are an individual, you may transfer your interest in this Agreement to a Business Entity for convenience of operation within the first 12 months of this Agreement by signing Franchisor's standard form of assignment and assumption agreement if: (a) the Business Entity is formed solely for purposes of continuing your development rights and obligations; (b) you provide to Franchisor a copy of the Business Entity's formation and governing documents and a certificate of good standing from the jurisdiction under which the Business Entity was formed; (c) you si
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, an individual developer transferring their interest to a business entity for convenience within the first 12 months of the agreement is subject to an administrative fee of $1,500. This transfer is permitted if the business entity is formed solely to continue the development rights and obligations initially agreed upon.
For a prospective Aplus franchisee, this means that if you initially sign the development agreement as an individual but later decide to operate under a corporate structure (like an LLC or S-Corp) for liability or tax reasons, you can transfer the agreement to that entity. However, this transfer is not automatic. Aplus requires you to use their standard assignment and assumption agreement and meet certain conditions.
Specifically, the business entity must be created only to continue your Aplus development obligations, you must provide Aplus with the entity's formation documents and a certificate of good standing, and you must sign a general release in favor of Aplus. Meeting these conditions and paying the $1,500 administrative fee allows you to make the transfer without needing to seek full approval for a more complex transfer scenario, which might involve greater scrutiny and costs.