What is the maximum beneficial interest an Aplus franchisee can have in a publicly held company without violating the non-compete agreement?

According to Aplus's 2024 Franchise Disclosure Document, an Aplus franchisee can own less than a 5% beneficial interest in the outstanding equity securities of any company registered under the Securities Act of 1933 or the Securities Exchange Act of 1934 without violating the non-compete agreement. This exception applies specifically to publicly held companies.

This means that an Aplus franchisee can invest in publicly traded companies, even those that might be considered competitors, as long as their ownership stake remains below the 5% threshold. This provision allows franchisees to diversify their investments without being penalized under the non-compete clause of the franchise agreement.

It is important for prospective franchisees to understand this exception, as it provides some flexibility in their investment strategies. However, they should also be aware that Aplus retains the right to modify the scope of the non-compete covenants, potentially affecting this exception, although such modifications would require written notice from Aplus.