What outstanding obligations must be satisfied before Aplus will consent to a transfer of agreement or controlling interest?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisor will not unreasonably withhold its consent to a transfer, but may condition its consent on satisfaction of any or all of the following:
- 8.4.1.
Your written request for consent and delivery of a copy of the proposed transfer agreements, including sale terms, at least 30 days prior to the proposed transfer, and Franchisor has determined, in its sole and reasonable discretion, that the terms of the sale will not materially and adversely affect the post transfer viability of any Store in operation at the time of transfer.
- 8.4.2.
The transferee has demonstrated to Franchisor's satisfaction that the transferee meets Franchisor's then-current educational, managerial and business standards; possesses a good moral character, business reputation and credit rating; has the aptitude and ability to operate each Store; and has sufficient equity capital to operate each Store (which condition shall be presumed if the transferee's net worth is equal to or exceeds your net worth at the time of transfer, excluding the value of each Store);
- 8.4.3.
All of your accrued monetary obligations and all other outstanding obligations to Franchisor, its Affiliates, and third party suppliers shall be up to date, fully paid and satisfied, and you must be in full compliance with this Agreement and any other agreements between you and Franchisor, its Affiliates and your suppliers;
- 8.4.4.
You and each Owner has executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor and its Affiliates and their respective officers, directors, managers, shareholders, agents and employees in their corporate and individual capacities, including, without limitation, claims arising under federal, state and local laws, rules and ordinances; provided, however, that any release will not be inconsistent with any state law regulating franchising;
- 8.4.5.
Payment of the Transfer Fee in the amount set forth in the Summary Page;
- 8.4.6.
You and the transferee have executed an assignment and assumption of this Agreement in the form prescribed by Franchisor;
- 8.4.7.
If the transferee is a Business Entity, then the transferee's Owners each shall sign Franchisor's standard form of Guaranty and Personal Undertaking; and
- 8.4.8.
The transferee has have complied with Franchisor's then-current initial training requirements for the operation of each then-existing Store.
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, before Aplus will consent to a transfer of agreement or controlling interest, several obligations must be met. The franchisee must submit a written request for consent along with a copy of the proposed transfer agreements, including sale terms, at least 30 days before the proposed transfer. Aplus must determine that the sale terms will not negatively affect the viability of any operating store.
The transferee must demonstrate that they meet Aplus's current standards for education, management, and business acumen. They must also possess good moral character, business reputation, and credit rating, and have the aptitude and ability to operate each store. The transferee must have sufficient equity capital to operate each store, which is presumed if their net worth equals or exceeds the franchisee's net worth at the time of transfer, excluding the value of each store.
Furthermore, all accrued monetary obligations and other outstanding obligations to Aplus, its affiliates, and third-party suppliers must be fully paid and up to date. The franchisee must be in full compliance with the agreement and any other agreements with Aplus, its affiliates, and suppliers. Both the franchisee and each owner must execute a general release of all claims against Aplus and its affiliates. The franchisee must also pay a transfer fee, and both the franchisee and the transferee must execute an assignment and assumption of the agreement in the form prescribed by Aplus. If the transferee is a business entity, its owners must sign Aplus's standard form of Guaranty and Personal Undertaking. Finally, the transferee must comply with Aplus's current initial training requirements for operating each existing store.