What is the deadline for an individual Aplus franchisee to transfer their interest to a business entity for convenience?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
on of these facilities (which you acknowledge may be proximate to any Store developed under this Agreement).
- 8.2. Transfer by Individual Developer to Business Entity for Convenience. If you are an individual, you may transfer your interest in this Agreement to a Business Entity for convenience of operation within the first 12 months of this Agreement by signing Franchisor's standard form of assignment and assumption agreement if: (a) the Business Entity is formed solely for purposes of continuing your development rights and obligations; (b) you provide to Franchisor a copy of the Business Entity's formation and governing documents and a certificate of good standing from the jurisdiction under which the Business Entity was formed; (c) you si
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, an individual franchisee has a limited time frame to transfer their franchise interest to a business entity for convenience. Specifically, this transfer must occur within the first 12 months of the Development Agreement.
To complete this transfer, the Aplus franchisee must use the franchisor's standard assignment and assumption agreement. Several conditions must be met, including forming the business entity solely to continue the development rights and obligations under the original agreement. The franchisee must also provide Aplus with copies of the business entity's formation and governing documents, along with a certificate of good standing.
Additionally, the franchisee is required to sign a general release in favor of Aplus, using the form that Aplus requires. Aplus also charges a $1,500 administrative fee for processing this type of transfer. Failing to meet these conditions or exceeding the 12-month timeframe would likely mean the franchisee would need to seek consent from Aplus under the standard transfer provisions, which may involve more stringent requirements and could be subject to Aplus's discretion.