What happens to the two-year non-solicitation period if there is an event of non-compliance with the Aplus franchise agreement?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
- 17.3.2. Except as otherwise approved in writing by Franchisor, neither Franchisee, nor any holder of a legal or beneficial interest in Franchisee, nor any officer, director, executive, manager, or member of the professional staff of Franchisee, shall, for a period of two (2) years after the expiration or termination of this Agreement, regardless of the cause of termination, either directly or indirectly, for themselves or through, on behalf of or in conjunction with any person or entity solicit or otherwise attempt to induce or influence any customer or other business associate of Franchisor and or APLUS and/or SUNOCO franchisees to terminate or modify his, her or its business relationship with APLUS and/or SUNOCO; or
- 17.3.4 The two (2) year period shall be tolled during any event of non-compliance.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, the standard two-year non-solicitation period can be extended if the franchisee is non-compliant with the franchise agreement. Specifically, the two-year period during which the franchisee is restricted from soliciting customers or business associates of Aplus is tolled during any event of non-compliance.
In practical terms, this means that if a franchisee violates the Aplus franchise agreement, the clock on the two-year non-solicitation period pauses. The period of non-compliance is added to the end of the original two-year term. For example, if a franchisee is in non-compliance for three months, the non-solicitation period would effectively become two years and three months.
This provision protects Aplus by preventing a franchisee who has violated the agreement from immediately competing or poaching clients as soon as the original term expires. It incentivizes franchisees to remain in compliance throughout the term of the agreement, as any breach will prolong the period during which they are restricted from soliciting Aplus's customers or business associates. This is a fairly standard practice in franchising, designed to protect the brand and its existing franchisees from unfair competition by former franchisees who may have gained knowledge or relationships through the franchise system.