What are the Aplus franchisee's obligations regarding supervision of the Franchised Business after the death or incapacity of an owner?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
"Incapacity" means the inability of Franchisee, or any holder of a legal or beneficial interest in Franchisee, to operate or oversee the operation of the Franchised Business on a regular basis by reason of any continuing physical, mental or emotional condition, chemical dependency or other limitation.
"Owner" means the individual or individuals who have an ownership interest in Franchisee.
"Designated Manager" means the individual designated by Franchisee as having primary responsibility for managing the day-to-day supervision and affairs of the Franchised Business.
If Franchisee operates the APLUS Store as a sole proprietor, then Franchisee shall also be the Designated Manager.
If Franchisee operate under any approved form of business entity, unless we agree otherwise, the Designated Manager must be the 51% owner of the voting stock or other ownership interest in the entity.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
Based on the 2024 Aplus Franchise Disclosure Document, the term 'Incapacity' refers to the inability of the franchisee, or any individual holding a legal or beneficial interest in the franchisee, to consistently operate or oversee the franchised business due to a continuing physical, mental, or emotional condition, chemical dependency, or other limitation. The FDD specifies that if the franchisee operates the Aplus store as a sole proprietor, then the franchisee shall also be the Designated Manager. If the franchisee operates under any approved form of business entity, unless Aplus agrees otherwise, the Designated Manager must be the 51% owner of the voting stock or other ownership interest in the entity.
However, the excerpt of the FDD provided does not specify the obligations of the franchisee regarding supervision of the Franchised Business after the death or incapacity of an owner.
To fully understand the obligations of an Aplus franchisee in the event of death or incapacity, a prospective franchisee should seek clarification from the franchisor regarding succession plans, required management structures, and any stipulations for maintaining operational standards during such circumstances. This information is crucial for ensuring business continuity and compliance with the franchise agreement.