If an Aplus developer dies or becomes incapacitated, what conditions must be met to avoid termination of the Development Agreement?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
sfers of assets. No shares of a | Sunoco Retail LLC
| Provision | Section in Development Agreement | Summary | |
|---|---|---|---|
| developer which is a business entity may be offered for sale through the public offering of securities. Shares may be offered by private offering with our prior written consent. | |||
| l. | Franchisor approval of transfer by Developer | Section 8.4 | Transfers require our prior written consent, which may be withheld for any reason, in our sole subjective judgment. However, transfers that do not result in a change of control may, subject to certain conditions described in the development agreement, be completed without our prior written consent. |
| m. | Conditions for franchisor approval of transfer | Section 8.4 | You may not transfer any franchise agreement signed under the development agreement, except with our written consent and a simultaneous assignment of the development agreement and all of the franchise agreements signed under the development agreement to the same assignee. You must pay the applicable transfer fee and sign a general release. |
| n. | Franchisor's right of first refusal to acquire Developer's business | Not Applicable | Not applicable |
| o. | Franchisor's option to purchase Developer's business | Not applicable | Not applicable |
| p. | Death or disability of Developer | Section 8.9 | Same requirements as for a transfer in "m" above. If your interest is not transferred within six months following your (or an Owner's) death or legal incapacity, your development agreement may be terminated. |
| q. | Non-competition covenants during the term of the Agreement | Not applicable | Not applicable |
| r. |
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, the death or legal incapacity of a developer or owner triggers specific transfer requirements to avoid termination of the Development Agreement. If the interest in the Development Agreement is not transferred within six months following the death or legal incapacity, Aplus has the right to terminate the agreement.
The conditions for transfer in the event of death or incapacity mirror the general transfer requirements outlined in Section 8.4 of the Development Agreement. These requirements include obtaining Aplus's prior written consent for the transfer. Aplus retains the right to withhold consent for any reason, at its sole discretion.
Prospective Aplus developers should be aware of these stipulations, as failure to transfer the Development Agreement within the specified timeframe following death or incapacity could lead to termination. It is advisable to consult with legal and financial professionals to ensure proper planning and compliance with these transfer requirements.