What is the Aplus developer's obligation regarding the Development Schedule?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
5. DEVELOPER'S OBLIGATIONS
- 5.1. Satisfaction of Development Schedule. You shall execute a Franchise Agreement for each Store contemplated under this Agreement in accordance with Section 4.1. and the Development Schedule and shall establish and operate each Store in accordance with the terms and conditions of the respective Franchise Agreement.
If during the term of this Agreement, you cease to operate any Store developed under this Agreement for any reason, you shall develop a replacement Store.
The replacement Store shall be developed within a reasonable time (not to exceed 180 days) after you cease to operate the original Store.
If, during the term of this Agreement, you transfer your interest in a Store in accordance with the terms of the applicable Franchise Agreement for the Store, the transferred Store will continue to be counted in determining whether you have complied with the Development Schedule so long as it continues to be operated as the Store with the Authorized Brand.
If the transferred Store ceases to be operated as a Store with the Authorized Brand during the term of this Agreement, you shall develop a replacement Store within a reasonable time (not to exceed 180 days) thereafter.
- 4.4.2.
Your failure to adhere to the Development Schedule (including any extensions thereof, approved by Franchisor in writing) or to any time period for the development of replacement Stores is a material breach of this Agreement.
- 4.4.3.
You acknowledge and agree that you have conducted an independent investigation of the business contemplated under this Agreement, that you fully understand your obligations under this Agreement, and that you recognize and assume all associated risks.
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, a developer must adhere to the Development Schedule outlined in the Development Agreement. Specifically, the developer is obligated to execute a Franchise Agreement for each store contemplated within the agreement, following the guidelines set in Section 4.1 and the Development Schedule. They must also establish and operate each store in accordance with the terms and conditions specified in the respective Franchise Agreement.
If a developer ceases to operate a store developed under the agreement for any reason, they are obligated to develop a replacement store. This replacement store must be developed within a reasonable timeframe, not exceeding 180 days, after the original store ceases operation. Similarly, if the developer transfers their interest in a store, the transferred store will continue to count towards compliance with the Development Schedule, provided it continues to operate as an Aplus store. If the transferred store ceases to operate as an Aplus store, the developer must develop a replacement store within 180 days.
Aplus emphasizes that failure to adhere to the Development Schedule, including any approved extensions, or to the specified timeframes for developing replacement stores, constitutes a material breach of the Development Agreement. The developer acknowledges that they have conducted an independent investigation of the business, fully understand their obligations, and assume all associated risks.