Does the definition of 'Competitive Business' for Aplus include businesses that grant franchises to others?

According to Aplus's 2024 Franchise Disclosure Document, the definition of a 'Competitive Business' does include businesses that grant franchises or licenses to others. Specifically, a 'Competitive Business' is defined as any business that offers or provides competitive services, or grants franchises or licenses to others to operate a business that offers or provides competitive services. This definition is relevant to franchisees as it outlines the types of businesses they are restricted from owning or being involved with, both during the term of their agreement and for a specified period afterward.

However, there are exceptions to this definition. The term 'Competitive Business' does not apply to any business operated by the Developer (the franchisee) under a Franchise Agreement with Aplus, or any business operated by a publicly-held entity in which the Developer owns less than a five percent legal or beneficial interest. This means that franchisees are not restricted from operating other Aplus franchises, and they can hold minor investments in publicly-traded companies that may be considered competitive.

This definition and its exceptions are important for prospective Aplus franchisees to understand, as they dictate the scope of non-compete obligations. Franchisees should carefully consider these restrictions and how they might impact their future business ventures. It is also advisable to seek legal counsel to fully understand the implications of these clauses before entering into a franchise agreement with Aplus.