If I own less than 5% of a publicly-held entity, is that considered a 'Competitive Business' under the Aplus Franchise Agreement?

According to Aplus's 2024 Franchise Disclosure Document, a 'Competitive Business' is defined as any business that offers services similar to those of Aplus or Sunoco, or that could potentially use Aplus's trade secrets or confidential information to the detriment of Aplus, its affiliates, or other franchisees. However, there are exceptions to this definition. Specifically, the definition of 'Competitive Business' does not apply to businesses operated under a franchise agreement with Aplus, or to publicly-held entities in which the franchisee owns less than a 5% legal or beneficial interest.

For a prospective Aplus franchisee, this means that owning a small stake (less than 5%) in a publicly-held company that might be considered a competitor will not automatically disqualify them or be considered a breach of the franchise agreement. This clause provides some flexibility for franchisees who may have diversified investments.

It is important to note that this exception applies only to publicly-held entities. Owning a larger stake or being involved in the operation of a privately-held competitive business could still be a violation of the franchise agreement. Franchisees should ensure they fully understand these restrictions to avoid potential conflicts of interest or breaches of contract with Aplus.