Does Aplus reserve the right to operate APLUS Stores outside the franchisee's development area?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
We reserve to ourselves all other rights, including the right to own and operate and to grant others the right to own and operate APLUS Stores outside the development area, regardless of their proximity to the development area, and in "Captive Markets" located within and outside the development area. We also have the right to distribute products and services identified by the Marks, such as pre-packaged products, through alternative channels of distribution including the Internet. We are not required to compensate you if we exercise any of the rights specified above inside your development area.
Source: Item 12 — TERRITORY (FDD page 47)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, Aplus retains specific rights regarding the operation of APLUS Stores outside a franchisee's development area. Aplus reserves all rights to itself, including the right to own and operate, and to grant others the right to own and operate APLUS Stores outside the development area, regardless of their proximity to the development area. This also includes operating in "Captive Markets" both within and outside the development area. Aplus is not required to compensate the franchisee if it exercises any of these rights within the franchisee's development area.
This policy means that while a franchisee may be granted a development area, it is not an exclusive territory. Aplus can establish its own stores or grant franchises to others outside this area, even if they are nearby. The term "Captive Markets" suggests locations such as airports, universities, or military bases where Aplus may want to operate stores directly or through other franchisees, irrespective of the franchisee's territory.
For a prospective franchisee, this lack of territorial exclusivity represents a significant risk. Competition from other Aplus stores, whether company-owned or franchised, could impact the franchisee's sales and profitability. The franchisee should carefully consider the potential for such competition when evaluating the Aplus franchise opportunity and discuss with Aplus what factors they consider when opening new locations near existing franchisees.
Furthermore, Aplus also retains the right to distribute products and services identified by its Marks through alternative channels of distribution, including the Internet. This could further impact a franchisee's revenue, as customers might choose to purchase products online rather than visiting the physical store. The franchisee should assess the potential impact of online sales and other alternative distribution channels on their business.