If I breach my obligations under an Aplus franchise agreement, how long do I have to cure the default?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in | Summary | |
|---|---|---|---|
| Development Agreement | |||
| a. Length of the Agreement term | Section 2.1 | The period beginning on the effective date and ending on the earlier of: (i) the date on which you have completed your development obligations, or (ii) 12:00 midnight CST on the last day specified in the development schedule. | |
| b. Renewal or extension of the | No provision | Not applicable. | |
| term | |||
| c. Requirements for Developer | No provision | Not applicable | |
| to renew or extend | |||
| d. Termination by Developer | No provision | Not applicable | |
| e. Termination by the | No provision | Not applicable | |
| franchisor without cause | |||
| f. Termination by the franchisor with “cause” | Sections 9.1, 9.2., 9.3, 9.4, 9.5, and 9.6 | We can terminate if you materially default under your development agreement, an individual franchise agreement, or any other agreement between you or your affiliate and us. In the event of the death or permanent incapacity of an owner, we may terminate if you fail to adhere to the applicable transfer requirements. | |
| g. “Cause” defined - curable defaults | Sections 9.3, 9.4, 9.5, and 9.6 | You have 10 days to cure a failure to pay fees and 30 days to cure any other default, and in the case of a breach or default in the performance of your obligations under any franchise agreement or other agreement between you and us. | |
| h. “Cause” defined – non- curable defaults | Sections 9.1 and 9.2 | Non-curable defaults: unapproved transfers; failure to meet development obligation; any breach of confidentiality or unfair competition described in Section 10; cross defaults, bankruptcy, foreclosure, insolvency, conviction of a felony, misrepresentations in your application, and/or repeated defaults, even if cured. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 53–64)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, if you fail to meet your obligations under the franchise agreement, the time you have to correct the issue depends on the nature of the default. Specifically, if you fail to pay fees owed to Aplus, you have ten days to resolve the issue. For any other type of default under the franchise agreement or any other agreement you have with Aplus, you are given 30 days to cure the default.
It is important to note that some defaults are considered non-curable, meaning Aplus can terminate the franchise agreement immediately without giving you an opportunity to fix the problem. These non-curable defaults include actions such as unapproved transfers of the franchise, failure to meet development obligations, breaches of confidentiality or engaging in unfair competition, bankruptcy, foreclosure, insolvency, conviction of a felony, misrepresentations in your application, and repeated defaults, even if those defaults were previously cured.
As a prospective Aplus franchisee, you should carefully review the franchise agreement to fully understand what constitutes a curable versus a non-curable default. Understanding these terms is crucial, as it directly impacts your rights and responsibilities and the potential for Aplus to terminate your franchise agreement. You should also seek legal counsel to clarify any ambiguities or concerns before signing the agreement.