Does Aplus grant exclusive development areas to franchisees?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
- 1.2.1. You will not receive an exclusive Development Area. Franchisor reserves the right to grant any third-party or Affiliate the right to operate another Store of the same Authorized Brand within the Development Area.
- 1.2.2. Franchisor reserves to itself other rights in and to use the Marks including the right to: (a) own and operate and to grant others the right to own and operate Stores outside the Development Area, regardless of their proximity to the Development Area; (b) operate Store and license the use of the Marks and System in "Captive Markets" within and outside the Development Area; and (c) distribute products and services identified by the Marks, through alternative channels of distribution the Internet.
- 1.2.3. Nothing in this Agreement prohibits or restricts Franchisor from (a) owning, acquiring, establishing, operating, or granting franchise rights for one or more other businesses under a different trademark or service mark (i.e., marks other than APLUS or SUNOCO), whether or not the business is the same as or competitive with Stores; or (b) owning, operating, or franchising one or more businesses offering products or services other than similar to those provided in the Franchise Agreement under the name APLUS, SUNOCO, or some derivative of the Marks.
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, Aplus does not grant exclusive development areas to franchisees. The Development Agreement specifies that Aplus retains the right to allow other third parties or affiliates to operate stores of the same authorized brand within a franchisee's development area. This means that while a franchisee may have the right to develop stores in a particular area, Aplus is not restricted from allowing others to open competing Aplus stores nearby.
Furthermore, Aplus reserves the right to operate stores and license the use of its marks in "Captive Markets" both inside and outside the development area. Captive Markets include venues like turnpikes, airports, and military bases. Aplus also retains the right to distribute products and services identified by its marks through alternative channels, including the Internet, without restriction.
Additionally, the agreement does not prevent Aplus from owning, operating, or franchising other businesses under different trademarks, even if they compete with Aplus stores. Aplus can also operate or franchise businesses offering different products or services under the Aplus or Sunoco name. This broad reservation of rights means that Aplus franchisees face the risk of direct competition from other Aplus-branded or affiliated businesses, even within their designated development areas.
Prospective Aplus franchisees should carefully consider the implications of not receiving an exclusive development area. The lack of exclusivity could impact the potential profitability of their Aplus stores, as they may face competition from other Aplus outlets or related businesses. It is important to evaluate the market conditions and potential for competition within the proposed development area before investing in an Aplus franchise.