What geographic restrictions apply to my involvement with a Competitive Business after I cease to be an Owner of an Aplus franchise?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
For a two-year period after I cease to be an Owner (or two years after termination or expiration of the Development Agreement, whichever occurs first) and if I am in default of the Development Agreement, I will not:
(a) Divert or attempt to divert any present or prospective customer of the APLUS Store to any competitor or do anything to harm the goodwill associated with the Marks and the System; or
(b) Own, maintain, advise, operate, engage in, be employed by, make loans to, invest in, provide any assistance to, or have any interest in (as owner or otherwise) or relationship or association with any Competitive Business, and (a) is, or is intended to be, located within the former Development Area; or (b) within a 25-mile radius of any APLUS Store in existence or under development at the time of such expiration, termination or transfer.
The obligations described in this Section 6 shall be tolled during any period of noncompliance and shall exclude any Competitive Business already open for business to the public at the time of expiration or termination of the Development Agreement.
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, there are geographic restrictions on involvement with a Competitive Business for a period of two years after ceasing to be an Owner. These restrictions apply if the Owner is in default of the Development Agreement.
Specifically, during this two-year period, the Owner cannot engage in any Competitive Business that is located within the former Development Area. Additionally, the restrictions apply to any Competitive Business located within a 25-mile radius of any Aplus store that is either in existence or under development at the time of the expiration, termination, or transfer of ownership.
However, these obligations are suspended during any period of noncompliance. Also, any Competitive Business that was already open to the public at the time of the Development Agreement's expiration or termination is excluded from these restrictions. Aplus also retains the right to reduce the scope of any covenant set forth in this section.