Does the Aplus franchise agreement contain any non-competition covenants during the term of the franchise?

According to Aplus's 2024 Franchise Disclosure Document, the franchise agreement does not contain any non-competition covenants during the term of the franchise. This means that while operating an Aplus franchise, a franchisee is not restricted by the franchise agreement from engaging in other business ventures, even those that might be considered competitive. This provides franchisees with greater flexibility and entrepreneurial freedom during the term of their agreement.

However, it is important to note that Aplus does impose non-competition covenants after the franchise is terminated or expires under certain conditions. Specifically, if the franchisee or any owner is in default, leading to premature termination of the franchise agreement, they are prohibited from owning an interest in, investing in, managing, operating, or being employed by any competitive business within 20 miles of their Aplus store or any other Aplus store. This restriction lasts for two years after the termination or expiration of the franchise agreement.

This post-term non-compete clause does have an exception: it does not apply to any competitive businesses owned by the franchisee or an affiliate at the time of termination of the franchise agreement. Therefore, a prospective franchisee should carefully consider the implications of these non-competition covenants, particularly those that apply after termination, and how they might affect their future business endeavors. Understanding these restrictions is crucial for making an informed decision about investing in an Aplus franchise.