What attachment to the Aplus agreement must be amended to reflect new ownership after a transfer among owners?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
r requires; and (d) you pay to Franchisor a $1,500 administrative fee.
- 8.3. Transfer Among Owners; Transfer of Non-Controlling Interest. If you are a Business Entity, your Owners may transfer their ownership interests in the Business Entity among each other, and may transfer up to a Non-Controlling Interest in the Business Entity to one or more third parties, if: (a) you have provided to Franchisor advance notice of the transfer; (b) Attachment C to this Agreement has been amended to reflect the new ownership; (c) each new Owner has signed a Guaranty and Personal Undertaking in the form of Attachment D; (d) each previous and/or new Owner has sign
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, if the franchisee is a business entity and the owners transfer their ownership interests among each other, Attachment C to the Aplus agreement must be amended to reflect the new ownership structure. This requirement is triggered when ownership interests in the business entity are transferred between existing owners or when a non-controlling interest is transferred to a third party.
In addition to amending Attachment C, each new owner must sign a Guaranty and Personal Undertaking in the form of Attachment D. Furthermore, both the previous and new owners are required to sign a general release in favor of Aplus. Aplus also requires a $2,500 administrative fee for processing the transfer.
These stipulations ensure that Aplus maintains an updated record of the ownership and that all owners are bound by the obligations and responsibilities outlined in the franchise agreement. The administrative fee likely covers the costs associated with updating records and processing the required documentation. The personal guarantee ensures that Aplus has recourse to the personal assets of the owners, which is a common practice in franchising to ensure commitment and accountability.