What is considered an 'Affiliate' of Aplus, according to the franchise agreement?

According to Aplus's 2024 Franchise Disclosure Document, an 'Affiliate' is defined within the glossary of additional terms in the Development Agreement. Specifically, an Affiliate includes any entity that is affiliated with, a subsidiary of, or a parent of a named person, entity, or Owner. The definition also extends to any entity controlled by, controlling, or under common control with such named person, entity, or Owner.

For a prospective Aplus franchisee, this definition is important because it broadens the scope of responsibility and potential liabilities under the franchise agreement. For example, if the franchisee is a corporation, its parent company, subsidiaries, and any other entities under common control would be considered Affiliates. This means that Aplus can require compliance from these Affiliates as well, and any defaults by these Affiliates could impact the franchisee's standing with Aplus.

This definition is also relevant in the context of financial obligations and adherence to the franchise agreement. Aplus requires that the franchisee and its Affiliates remain in good standing, with no defaults on any agreements. Therefore, understanding who qualifies as an Affiliate is crucial for ensuring compliance across all related entities. The franchisee should carefully review this definition with legal counsel to fully grasp its implications for their specific business structure and related entities.