What is the cure period for failure to pay fees 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, if a developer fails to pay fees under the Development Agreement, they have a 10-day period to correct the default. This cure period begins from the date that Aplus notifies the developer of the deficiency. If the developer rectifies the payment within this timeframe, Aplus will not terminate the Development Agreement.
This 10-day cure period specifically applies to the failure to pay fees. For any other type of default under the Development Agreement, the developer is provided a 30-day cure period.
It is important for prospective Aplus developers to understand these cure periods, as failure to adhere to them can result in the termination of their Development Agreement and loss of their franchise rights. Franchisees should ensure they have sufficient financial resources and systems in place to manage fee payments and address any potential defaults promptly.