What is the Aplus franchisor's standard form of assignment and assumption agreement?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
on of these facilities (which you acknowledge may be proximate to any Store developed under this Agreement).
- 8.2. Transfer by Individual Developer to Business Entity for Convenience. If you are an individual, you may transfer your interest in this Agreement to a Business Entity for convenience of operation within the first 12 months of this Agreement by signing Franchisor's standard form of assignment and assumption agreement if: (a) the Business Entity is formed solely for purposes of continuing your development rights and obligations; (b) you provide to Franchisor a copy of the Business Entity's formation and governing documents and a certificate of good standing from the jurisdiction under which the Business Entity was formed; (c) you si
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, if a developer is an individual, they may transfer their interest in the Development Agreement to a business entity within the first 12 months of the agreement. This transfer requires signing Aplus's standard form of assignment and assumption agreement.
Several conditions must be met for this transfer. The business entity must be formed solely to continue the development rights and obligations. The developer must provide Aplus with copies of the business entity's formation and governing documents, along with a certificate of good standing from the relevant jurisdiction. Additionally, the developer must sign a general release in favor of Aplus, using the form that Aplus requires, and pay a $1,500 administrative fee.
This provision allows individual developers some flexibility to structure their business operations after entering into the Development Agreement. However, it's important to note the strict conditions, including the limited timeframe, the purpose of the business entity, and the associated costs and releases. A prospective franchisee should carefully review the standard form of assignment and assumption agreement to understand its full implications before signing the Development Agreement.