Is Sunoco liable to Aplus franchisees for interruption of business or loss of profits resulting from Sunoco's reasonable exercise of its rights under the Lease?

According to Aplus's 2024 Franchise Disclosure Document, Sunoco is not liable to Aplus franchisees for business interruptions or lost profits if Sunoco reasonably exercises its rights, options, and privileges under the lease agreement. This means that while Sunoco has broad rights to access and modify the premises, including reconstruction or modernization, they are not responsible for compensating the franchisee for any resulting loss of income, provided their actions are deemed reasonable.

Sunoco's rights include conducting inspections and maintenance, auditing records, ensuring compliance with the lease, and reconstructing or modernizing the premises. If Sunoco chooses to reconstruct or modernize the premises, the fees outlined in Sections 1.03, 1.04, 2.05(A), 2.05(C), and 2.05(D) of the lease will be reduced to the extent the work makes the premises unusable. However, the lease term will not be extended due to such activities, and Sunoco retains the right to charge additional monthly fees based on the remodeling or reconstruction scope, with prior written notice provided to the franchisee.

This clause highlights a potential risk for Aplus franchisees. While the lease fees may abate during significant reconstruction, the franchisee will not receive compensation for lost profits. The franchisee should carefully consider the potential impact of such disruptions on their business and evaluate whether additional business interruption insurance is warranted. Furthermore, the franchisee should seek clarity from Sunoco regarding the criteria used to determine 'reasonable manner' when exercising its rights under the lease to minimize potential disputes.