What is considered a 'Competitive Business' under the Aplus Development Agreement, and what are the exceptions?

According to Aplus's 2024 Franchise Disclosure Document, a 'Competitive Business' is defined as any business that offers or provides (or grants franchises or licenses to others to operate a business that offers or provides) Competitive Services. However, there are exceptions to this definition.

Specifically, the term 'Competitive Business' does not apply to any business operated by the Developer under a Franchise Agreement with Aplus. This means that if a franchisee operates another Aplus franchise, it will not be considered a competitive business. Additionally, the definition excludes any business operated by a publicly-held entity in which the Developer owns less than a five percent (5%) legal or beneficial interest. This exception allows franchisees to invest in publicly traded companies that may have some competitive overlap with Aplus, as long as their ownership stake remains below the 5% threshold.

These stipulations are important for prospective Aplus developers to understand, as they clarify the boundaries of permissible business activities and investments. Franchisees should carefully consider these definitions and exceptions to ensure they remain in compliance with the Development Agreement and avoid potential conflicts of interest.