Before exercising development rights for Aplus, what must a franchisee do?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
ment Schedule set forth in Attachment B.
4.3. Manner for Exercising Development Rights.
- 4.3.1. Before exercising any development rights granted hereunder, you shall apply to Franchisor for a franchise to operate a Store. If Franchisor, in its sole discretion, determines that you have met each of the following operational, financial, and legal conditions, then Franchisor will grant you a franchise for each respective Store:
- (a) Operational Conditions: You are in compliance with the Development Schedule and this Agreement, and you or your Affiliates are in compliance with any other agreement between them and Franchisor or its Affiliate. You are conducting the operation of your existing Stores, if any, and are capable of conducting the operation of the proposed Store in accordance with the terms and conditions of this Agreement, the respective Franchise Agreements, and the standards, specifications, and procedures set forth and described in the Manuals (defined in the Franchise Agreement).
- (b) Financial Conditions: You and your Owners satisfy Franchisor's then-current financial criteria for developers and Owners of Stores. You and your Owners have been and are faithfully performing all terms and conditions under each of the existing Franchise Agreements and related agreements with Franchisor or its Affiliate.
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, a franchisee must apply to Aplus for a franchise to operate a store before exercising any development rights. Aplus will then determine if the franchisee has met certain operational, financial, and legal conditions.
Operationally, the franchisee must be in compliance with the Development Schedule and the Development Agreement. They (or their affiliates) must also be in compliance with any other agreements between them and Aplus or its affiliates. Furthermore, the franchisee must be capable of operating the proposed store according to the terms of the agreements and the standards outlined in the manuals.
Financially, the franchisee and their owners must meet Aplus's current financial criteria for developers and store owners. They must also be faithfully performing all terms and conditions under existing franchise and related agreements with Aplus or its affiliates.
Legally, the franchisee must submit all requested information and documents to Aplus in a timely manner. Meeting these conditions is crucial for a franchisee to successfully expand their Aplus business under the development agreement.