For how long does the non-competition covenant apply after termination of the Aplus Development Agreement due to default?

Question

Accepted Answer

|    | 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. | Non-competition covenants after the Agreement is terminated or expires | Section 10.2 | In the event you or an affiliate is in default of the Development Agreement which has led to premature termination of the Development Agreement, you and any owner are prohibited from owning an interest in, investing in, managing, operating, or performing services, consulting with, or be employed by or for any competitive business located in the development area or located within 25 miles of any APLUS Store in existence at under development at the time of such termination, for two years after termination of the Development Agreement.

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 53–64)

For how long does the non-competition covenant apply after termination of the Aplus Development Agreement due to default?

Answer from 2024 FDD Document

What This Means (2024 FDD)

	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.	Non-competition covenants after the Agreement is terminated or expires	Section 10.2	In the event you or an affiliate is in default of the Development Agreement which has led to premature termination of the Development Agreement, you and any owner are prohibited from owning an interest in, investing in, managing, operating, or performing services, consulting with, or be employed by or for any competitive business located in the development area or located within 25 miles of any APLUS Store in existence at under development at the time of such termination, for two years after termination of the Development Agreement.