Besides failure to meet obligations, are there any other circumstances that permit Aplus to modify a franchisee's territorial rights under the development agreement?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
If you fail to meet any of your obligations under the development agreement, including the development schedule obligations, we may (i) terminate or modify any territorial protections granted to you, (ii) reduce the size of the development area, or (iii) reduce the number of APLUS Stores which you may establish under the development schedule. There are no other circumstances that permit us to modify your territorial rights under the development agreement.
Source: Item 12 — TERRITORY (FDD page 47)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, Aplus may modify a franchisee's territorial protections if the franchisee fails to meet their obligations under the development agreement. These obligations include adhering to the development schedule. If a franchisee fails to meet these obligations, Aplus has the right to take certain actions.
Specifically, Aplus may (i) terminate or modify any territorial protections granted to the franchisee, (ii) reduce the size of the development area, or (iii) reduce the number of APLUS Stores which the franchisee may establish under the development schedule. This means that if a franchisee does not meet the agreed-upon milestones for opening new stores or other requirements outlined in the development agreement, Aplus can alter the franchisee's territory, potentially shrinking it or reducing the number of stores they are allowed to open.
The FDD explicitly states that there are no other circumstances that permit Aplus to modify a franchisee's territorial rights under the development agreement besides the franchisee failing to meet their obligations. This provides some clarity for potential franchisees, indicating that as long as they fulfill their obligations, their territorial rights should remain unchanged.