What is excluded from the non-compete obligations for a former Aplus Owner?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
nded to be, located within the former Development Area; or (b) within a 25-mile radius of any APLUS Store in existence or under development at the time of such expiration, termination or transfer. The obligations described in this Section 6 shall be tolled during any period of noncompliance and shall exclude any Competitive Business already open for business to the public at the time of expiration or termination of the Development Agreement.
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- I agree that the provisions contained in Article 14 of the Development Agreement will apply to any dispute arising out of or relating to this Guaranty.
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, the non-compete obligations for a former Aplus Owner do not apply to any Competitive Business that was already open to the public at the time of the expiration or termination of the Development Agreement. This means that if an Aplus Owner was already involved in a competing business before their agreement with Aplus ended, the non-compete clause would not prevent them from continuing to operate that existing business.
Additionally, if the Development Agreement is terminated early due to the Owner's default, any Competitive Business already owned by the Owner or their Affiliate at the time of termination is also excepted from the non-compete obligations outlined in Section 10.1 of the agreement. This exception provides some protection for Owners who may have pre-existing business interests that could be considered competitive.
These exclusions are important for prospective Aplus Owners to consider, as they define the boundaries of the non-compete obligations. It is essential to understand what activities and businesses are permitted even after leaving the Aplus franchise system, especially if the Owner has other business ventures or plans for the future. Franchisees should seek legal counsel to fully understand the implications of these non-compete clauses and their exclusions.