What constitutes a curable default under the Aplus Development Agreement?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Development | Summary | |
|---|---|---|---|
| Agreement | |||
| a. | Length of the Agreement term | Section 2.1 | The period beginning on the effective date and ending on the earlier of: (i) the date on which you have completed your development obligations, or (ii) 12:00 midnight CST on the last day specified in the development schedule. |
| b. | Renewal or extension of the term | No provision | Not applicable. |
| c. | Requirements for Developer to renew or extend | No provision | Not applicable |
| d. | Termination by Developer | No provision | Not applicable |
| e. | Termination by the franchisor without cause | No provision | Not applicable |
| f. | Termination by the franchisor with "cause" | Sections 9.1, 9.2., 9.3, 9.4, 9.5, and 9.6 | We can terminate if you materially default under your development agreement, an individual franchise agreement, or any other agreement between you or your affiliate and us. In the event of the death or permanent incapacity of an owner, we may terminate if you fail to adhere to the applicable transfer requirements. |
| g. | "Cause" defined - curable defaults | Sections 9.3, 9.4, 9.5, and 9.6 | You have 10 days to cure a failure to pay fees and 30 days to cure any other default, and in the case of a breach or default in the performance of your o |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 53–64)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, a curable default under the Development Agreement involves specific timeframes for resolution. If a franchisee fails to pay fees, they have a 10-day period to rectify the situation. For any other type of default, including breaches related to obligations under any franchise agreement or other agreements with Aplus, the franchisee is granted 30 days to cure the default.
This distinction in cure periods highlights the importance Aplus places on timely payments. The shorter cure period for fee-related defaults suggests that Aplus expects these issues to be resolved swiftly. The longer 30-day period for other defaults provides franchisees with more time to address and correct a broader range of potential issues, from operational deficiencies to breaches of contractual obligations.
It is important for prospective Aplus franchisees to understand these cure periods, as failure to remedy a default within the specified timeframe can lead to termination of the Development Agreement. Franchisees should ensure they have systems in place to monitor and address potential defaults promptly to avoid jeopardizing their franchise rights. Understanding the specific terms of the franchise agreement and related documents is crucial for compliance and maintaining a healthy franchise relationship with Aplus.