After the Aplus franchise agreement expires or terminates, what specific actions are prohibited regarding customers or business associates of Aplus and/or Sunoco franchisees?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
- 17.3.2. Except as otherwise approved in writing by Franchisor, neither Franchisee, nor any holder of a legal or beneficial interest in Franchisee, nor any officer, director, executive, manager, or member of the professional staff of Franchisee, shall, for a period of two (2) years after the expiration or termination of this Agreement, regardless of the cause of termination, either directly or indirectly, for themselves or through, on behalf of or in conjunction with any person or entity solicit or otherwise attempt to induce or influence any customer or other business associate of Franchisor and or APLUS and/or SUNOCO franchisees to terminate or modify his, her or its business relationship with APLUS and/or SUNOCO; or
- 17.3.3 In furtherance of this Section 17, Franchisor has the right to require certain individuals to execute standard form nondisclosure agreements in a form the same as or similar to the Nondisclosure Agreement attached as Attachment 2.
- 17.3.4 The two (2) year period shall be tolled during any event of non-compliance.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, for a period of two years after the expiration or termination of the franchise agreement, a franchisee is restricted from soliciting or attempting to influence any customer or business associate of Aplus and/or Sunoco franchisees to terminate or modify their business relationship with Aplus and/or Sunoco. This restriction applies regardless of the reason for the termination or expiration of the agreement. This restriction applies to the franchisee, anyone holding a legal or beneficial interest in the franchise, and any officer, director, executive, manager, or member of the professional staff of the franchisee.
This non-solicitation clause is designed to protect Aplus's trade secrets, goodwill, and confidential information, as well as its contractual relationships with other franchisees. It also aims to protect Aplus against the costs associated with training the franchisee and their staff. The two-year period during which these restrictions are in place can be extended if the franchisee is not in compliance with these terms.
For a prospective Aplus franchisee, this means that after leaving the Aplus system, they cannot actively try to take Aplus's customers or business contacts with them to a new venture. This is a fairly standard clause in franchise agreements, intended to prevent unfair competition and protect the franchisor's established business network. Franchisees should carefully consider these restrictions, as violating them could lead to legal consequences.
It is important to note that the FDD states that Aplus has the right to require certain individuals to execute standard form nondisclosure agreements. These agreements would likely further define and protect Aplus's confidential information and trade secrets. Prospective franchisees should review these agreements carefully to understand the full scope of their obligations.