Does the Aplus franchise agreement specify any state laws that could trigger termination?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in franchise or other agreement | Summary | |
|---|---|---|---|
| q. | Non-competition covenants during the term of the franchise | No provision | There is no covenant by either party not to compete. |
| r. | Non-competition covenants after the franchise is terminated or expires | APLUS - 7 | In the event you or any owner is in default which has led to premature termination of the franchise agreement, you and any owner are prohibited from owning an interest in, investing in, managing, operating, or performing services, consulting with, or be employed by or for any competitive business located within 20 miles of your APLUS Store or any other APLUS Store, for two years after termination or expiration of the franchise agreement. Excepted from this restriction are any competitive businesses owned by you or an affiliate at the time of termination of the franchise agreement. |
| s. | Modification of the agreement | APLUS – 23.7 Premises - 2.27 | Except for those permitted to be made unilaterally by us under the APLUS Franchise Agreement or related agreements, the agreements may not be modified unless mutually agreed to in writing. |
| t. Integration/merger clause | APLUS – 23.7 Premises - 2.27 | Only the terms of the APLUS Franchise Agreement and related agreements are binding (subject to state law). Any representations or promises outside of the disclosure document and APLUS Franchise Agreement and related agreements may not be enforceable. Nothing in the APLUS Franchise Agreement and related agreements is intended to disclaim any representations we made in this disclosure document. | |
| u. | Dispute resolution by arbitration or mediation | No provision | None |
| v. | Choice of Forum | APLUS – 24.2 | Subject to applicable state law, the venue for all proceedings related to or arising out of the APLUS Franchise Agreement is Dallas, Texas. See the State Specific Addenda attached to this Disclosure Document. |
| w. | Choice of Law | APLUS – 24.1 | Texas law applies (subject to applicable state law). See the State Specific Addenda attached to this Disclosure Document. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 53–64)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, the franchise agreement includes provisions that are subject to applicable state law. Specifically, the choice of forum and choice of law are influenced by state regulations. The venue for proceedings is Dallas, Texas, but this is "subject to applicable state law." Similarly, Texas law generally applies, but again, this is "subject to applicable state law." The document also mentions "State Specific Addenda attached to this Disclosure Document," which suggests that there may be state-specific modifications or additions to the standard franchise agreement.
This means that certain state laws could potentially override or modify aspects of the Aplus franchise agreement, including those related to termination. For example, a state law might provide additional protections to franchisees against termination, or it might impose specific requirements for termination that are not explicitly mentioned in the standard Aplus franchise agreement. These state-specific regulations are detailed in the State Specific Addenda.
Prospective Aplus franchisees should carefully review the State Specific Addenda applicable to their state to understand how state laws might affect their rights and obligations under the franchise agreement. It would be prudent to consult with a legal professional familiar with franchise law in their specific state to fully assess the potential impact of these state laws on the franchise relationship and the conditions under which the agreement can be terminated.