factual

What constitutes misuse of the Marks by an Aplus franchisee that could lead to termination?

Aplus Franchise · 2024 FDD

Answer from 2024 FDD Document

  • 6.1.2. Franchisee is permitted and required to use only the Marks approved by Franchisor to conduct the business granted pursuant to, and in compliance with, this Agreement and all applicable standards, specifications and operating procedures prescribed from time to time by Franchisor. Any unauthorized use of the Marks by Franchisee is a breach of this Agreement and an infringement of the rights of Franchisor in and to the Marks. Franchisee's use of the Marks, and any goodwill created thereby, shall inure to the benefit of Franchisor. Franchisee shall not at any time acquire an ownership interest in the Marks by virtue of any use it may make of the Marks. This Agreement does not confer any goodwill, title or interest in the Marks to Franchisee. Franchisee shall not, at any time during the term of this Agreement or after its termination or expiration, contest the validity or ownership of any of the Marks or assist any other person in contesting the validity or ownership of any of the Marks.

6.2. Limitations on Use

  • 17.1.2. Cease to use the Trade Secrets or other Confidential Information, the System and the Marks including, without limitation, all slogans, symbols, logos, advertising materials, stationery, forms and any other items which display or are associated with the Marks;
  • 17.1.3. Take such action as may be necessary to cancel or assign to Franchisor, at Franchisor's option, any assumed name or equivalent registration filed with state, city or county authorities which contains the name APLUS or any other Mark, and Franchisee shall furnish Franchisor with evidence satisfactory to Franchisor of compliance with this obligation within thirty (30) days after termination or expiration of this Agreement;

7.3. Exclusive Relationship

For two years after termination or expiration of this Agreement, neither Franchisee nor each personal guarantor as indicated in Attachment 3 ("Personal Guarantor"), any other holder of a legal or beneficial interest in Franchisee (or any member of their immediate families or households), nor any Owner, officer, director, executive, manager or member of the professional staff of Franchisee, either directly or indirectly, for themselves, or through, on behalf of or in conjunction with any person, partnership, corporation, limited liability company or other business entity, do or perform, directly or indirectly, any act injurious or prejudicial to the goodwill associated with the Marks or the System. Further, and only in the event of Franchisee or any Owner's default of this Agreement which has led to premature termination of this Agreement, Franchisee, each Personal Guarantor, and any Owner, shall not own an interest in, invest in, manage, operate, or perform services, consult with, or be employed by or for any Competitive Business located within 20 miles of the Franchised Business or any other APLUS store, for two years after termination or expiration of this Agreement; a Competitive Business that is owned by Franchisee or an affiliate at the time of the termination is excepted from this restriction. The two-year period shall be tolled during any event of non-compliance.

Source: Item 23 — RECEIPT (FDD pages 68–302)

What This Means (2024 FDD)

According to Aplus's 2024 Franchise Disclosure Document, a franchisee is permitted and required to use only the Marks approved by Aplus to conduct business. Any unauthorized use of the Marks by the franchisee is a breach of the Franchise Agreement and an infringement of the rights of Aplus.

Upon termination or expiration of the agreement, the franchisee must cease using the Marks, including all slogans, symbols, logos, advertising materials, stationery, forms, and any other items associated with the Marks. The franchisee must also take action to cancel or assign to Aplus any assumed name registrations that contain the name Aplus or any other Mark.

After the agreement terminates, the franchisee is prohibited from performing any act that is injurious or prejudicial to the goodwill associated with the Marks or the Aplus system for two years. If the Franchise Agreement is prematurely terminated due to the franchisee's default, the franchisee is restricted from owning an interest in, investing in, managing, operating, or being employed by any Competitive Business located within 20 miles of the Franchised Business or any other Aplus store for two years.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.