Does the Aplus franchisor have the option to assume the franchisee's lease upon termination?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in franchise or other agreement | Summary |
|---|---|---|
| or | ||
| similar | ||
| state | ||
| laws; | ||
| or | ||
| has | ||
| outstanding | ||
| judgments against it or any Owner for over 30 | ||
| days, (xxiii) any default under any agreement | ||
| between you and us or our Affiliate (cross | ||
| defaults) (xxiv) failure on 2 or more separate | ||
| noticed occasions to comply with the same | ||
| obligation in any time-frame, and (xxv) receive | ||
| two or more default notices within 12 month time | ||
| frame | ||
| for | ||
| any | ||
| violation | ||
| of | ||
| the | ||
| franchise | ||
| agreement or the System Standards. | ||
| i. Franchisee's obligations on termination/ nonrenewal | APLUS - 17 Premises - 2.23 | Upon termination or non-renewal of the APLUS Franchise Agreement only, you must: (i) immediately cease to operate the APLUS Store; (ii) cease to use the Trade Secrets or other Confidential Information, the System and the Marks including, without limitation, all slogans, symbols, logos, advertising materials, stationery, forms and any other items which display or are associated with the Marks; (iii) take such action as may be necessary to cancel or assign to Franchisor, at Franchisor's option, any assumed name or equivalent registration filed with state, city or county authorities which contains the name APLUS, SUNOCO, or any other Mark, and you must provide to Franchisor with evidence satisfactory to Franchisor of compliance with this obligation within thirty (30) days after termination or expiration of this Agreement; (iv) pay all sums owing to Franchisor and any affiliate (v) pay to Franchisor all costs and expenses, including reasonable attorneys' fees, incurred by Franchisor subsequent to the termination or expiration of the Franchise in obtaining injunctive or other relief for the enforcement of any provisions of the franchise agreement; (vi) immediately return to Franchisor the Systems Manual, Trade Secrets and all other Confidential Information including records, files, instructions, brochures, agreements, referral contact list, disclosure statements and any and all other materials provided by Franchisor to Franchisee relating to the operation of the APLUS Store; (vii) assign all of Franchisee's email addresses, any websites, and telephone listings and numbers |
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, upon termination or non-renewal of the franchise agreement, the franchisee must take action to assign to the franchisor any assumed name or equivalent registration filed with authorities that contains the names APLUS, SUNOCO, or any other Mark, at the franchisor's option. The franchisee must provide evidence of compliance within 30 days of termination or expiration. However, the FDD does not explicitly state whether Aplus has the option to assume the franchisee's lease upon termination or non-renewal of the franchise agreement.
Because the FDD does not provide specific details on lease assumption, it is important for a prospective franchisee to seek clarification from Aplus regarding their policy on lease assignments. Understanding the franchisor's rights and intentions regarding the lease can help a franchisee make informed decisions about their investment and potential liabilities.
It is common practice in franchising for the franchisor to have some control over the lease, especially since the location is often critical to the brand's success. The franchisor may want to ensure continued operation at the location or to have the flexibility to re-franchise it. Therefore, it is essential to discuss lease arrangements with Aplus during the due diligence process.