Does an Aplus franchisee waive claims related to a merger or acquisition by the franchisor?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
8.1. Transfer by Franchisor. Franchisor may transfer or assign all or any part of its rights or obligations under this Agreement to any person or legal entity. With respect to any assignment which results in the subsequent performance by the assignee of all of Franchisor's obligations under this Agreement, the assignee shall expressly assume and agree to perform such obligations, and shall become solely responsible for all of Franchisor's obligations under this Agreement from the date of assignment. In addition, and without limitation to the foregoing, you expressly affirm and agree that Franchisor and/or its Affiliates may sell their assets, the Marks, Copyrighted Works or the System; may sell securities in a public offering or in a private placement; may merge, acquire other corporations, or be acquired by another corporation; and may undertake a refinancing, recapitalization, leveraged buy-out, or other economic or financial restructuring. With regard to any of the above sales, assignments and dispositions, you expressly and specifically waive any claims, demands, or damages arising from or relating to the loss of Franchisor's name, the Marks (or any variation thereof), Copyrighted Works, and System and/or the loss of association with or identification of Sunoco Retail LLC as the franchisor under this Agreement. You specifically waive any and all other claims, demands, or damages arising from or related to the foregoing merger, acquisition, and other business combination activities including, without limitation, any claim of divided loyalty, breach of fiduciary duty, fraud, breach of contract, or breach of the implied covenant of good faith and fair dealing. You agree that Franchisor has the right, now or in the future, to purchase, merge, acquire, or affiliate with an existing competitive or non-competitive franchise network, chain, or any other business regardless of the location of that chain's or business' facilities, and to operate, franchise or license those businesses and/or facilities as Stores operating under the Marks or any other marks following Franchisor's purchase, merger, acquisition or affiliation, regardless of the location of these facilities (which you acknowledge may be proximate to any Store developed under this Agreement).
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, franchisees expressly waive claims, demands, or damages related to the loss of the franchisor's name, marks, copyrighted works, and system, or the loss of association with Sunoco Retail LLC as the franchisor, in the event of sales, assignments, and dispositions. This waiver specifically includes any claims, demands, or damages arising from or related to merger, acquisition, and other business combination activities.
This waiver extends to claims of divided loyalty, breach of fiduciary duty, fraud, breach of contract, or breach of the implied covenant of good faith and fair dealing. This means that if Aplus is involved in a merger, acquisition, or other business combination, franchisees give up their right to sue Aplus for issues arising from these actions, such as a perceived conflict of interest or failure to act in the franchisee's best interest.
Furthermore, Aplus retains the right to purchase, merge, acquire, or affiliate with any competitive or non-competitive franchise network, chain, or business, and to operate, franchise, or license those businesses as Aplus stores or under other marks. This can occur regardless of the location of these facilities, even if they are near an existing Aplus store. Franchisees acknowledge this right and its potential impact on their business.
This waiver is a significant consideration for potential franchisees, as it limits their legal recourse in the event of major changes to the Aplus franchise system due to mergers, acquisitions, or other business combinations. Prospective franchisees should carefully consider the implications of this waiver and seek legal advice before investing in an Aplus franchise.