What constitutes an unauthorized transfer of control of the Aplus Franchised Business that could lead to termination?

According to Aplus's 2024 Franchise Disclosure Document, an unauthorized transfer can occur if the franchisee sells, assigns, gives away, transfers, pledges, mortgages, or encumbers any interest in the Franchise Agreement, the License, the Store, substantially all of the Store's assets, or the ownership of the franchisee entity, either voluntarily or by operation of law (such as through divorce or bankruptcy proceedings). This definition of "Transfer" applies whether the action is a verb or a noun.

This means that a franchisee needs to obtain approval from Aplus before making significant changes to the ownership or control of the business. This includes not only direct sales or assignments but also situations like using the business as collateral for a loan or changes resulting from legal proceedings. Failing to get this approval could lead to termination of the franchise agreement.

This provision is typical in franchise agreements, as franchisors want to maintain control over who operates their branded businesses. Aplus wants to ensure that any new owner or controlling party meets their standards and has the necessary qualifications to uphold the brand's reputation and operational standards. Franchisees should be aware of these restrictions and seek franchisor approval before undertaking any action that could be construed as a transfer of ownership or control.