What happens if an Aplus franchisee fails to exercise their renewal right?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
If this Agreement expires without Franchisee properly exercising its renewal right and Franchisee continues to accept the benefits of this Agreement thereafter, then, at Franchisor's sole option, Franchisor may treat this Agreement either as: (i) expired as of the date of expiration, with Franchisee then illegally operating a franchise without a license to do so, in violation of Franchisor's rights and this Agreement; or (ii) continued on a month-to-month basis (the "Interim Period") until one (1) party provides the other with written notice of such party's intent to terminate the Interim Period, in which case, the Interim Period will terminate thirty (30) days after the other party's receipt of the notice to terminate the Interim Period or, if Franchisee's jurisdiction requires a termination notice period longer than thirty (30) days, the period will be the minimum notice period required by the laws of such jurisdiction. In the latter case, all obligations of Franchisee shall remain in full force and effect during the Interim Period as if this Agreement had not expired, and all obligations and restrictions imposed on Franchisee upon expiration of the Agreement shall take effect upon termination of the Interim Period.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, if a franchisee fails to properly exercise their renewal right but continues to operate the business and benefit from the franchise agreement, Aplus has two options. Aplus can treat the agreement as expired, meaning the franchisee is operating without a license and violating Aplus's rights. Alternatively, Aplus can continue the agreement on a month-to-month basis, referred to as the "Interim Period."
During this Interim Period, all of the franchisee's obligations remain in full effect, as if the original agreement had not expired. This means the franchisee must continue to meet all requirements and standards set forth in the franchise agreement. The Interim Period continues until either Aplus or the franchisee provides written notice of intent to terminate.
The termination of the Interim Period will occur thirty days after the other party receives the notice, unless the franchisee's jurisdiction requires a longer notice period, in which case the minimum notice period required by law will apply. Upon termination of the Interim Period, all obligations and restrictions imposed on the franchisee upon expiration of the original agreement will take effect.