What happens if a transferred Aplus store ceases to be operated as an Aplus store?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
If, during the term of this Agreement, you transfer your interest in a Store in accordance with the terms of the applicable Franchise Agreement for the Store, the transferred Store will continue to be counted in determining whether you have complied with the Development Schedule so long as it continues to be operated as the Store with the Authorized Brand.
If the transferred Store ceases to be operated as a Store with the Authorized Brand during the term of this Agreement, you shall develop a replacement Store within a reasonable time (not to exceed 180 days) thereafter.
- 4.4.2.
Your failure to adhere to the Development Schedule (including any extensions thereof, approved by Franchisor in writing) or to any time period for the development of replacement Stores is a material breach of this Agreement.
- 4.4.3.
You acknowledge and agree that you have conducted an independent investigation of the business contemplated under this Agreement, that you fully understand your obligations under this Agreement, and that you recognize and assume all associated risks.
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, if a transferred store ceases to be operated as an Aplus store during the term of the Development Agreement, the developer is required to develop a replacement store. This replacement store must be developed within a reasonable time frame, specifically not exceeding 180 days after the original store ceases operation under the Aplus brand.
This obligation is tied to the Development Schedule outlined in the agreement. Failing to adhere to this schedule, including the timeframe for developing replacement stores, constitutes a material breach of the Development Agreement. This means Aplus could pursue legal or financial remedies if the developer does not meet the requirement to replace the store within the specified period.
This clause ensures that Aplus maintains its brand presence and development momentum within the designated area. For a prospective developer, this highlights the importance of careful planning and due diligence in selecting viable locations and ensuring the long-term operation of each Aplus store. The developer bears the risk of identifying suitable locations and the economic risk of developing the required number of stores.
It is important for potential Aplus developers to fully understand their obligations under the Development Agreement, including the implications of store closures and the requirement to develop replacement stores within the given timeframe. This includes assessing the availability of suitable locations and the financial resources needed to meet these development obligations.