Are there any exceptions to the standard termination procedures for an Aplus franchise, as indicated in this table?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in franchise or other agreement | Summary | |
|---|---|---|---|
| r. | Non-competition covenants after the franchise is terminated or expires | APLUS - 7 | In the event you or any owner is in default which has led to premature termination of the franchise 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 within 20 miles of your APLUS Store or any other APLUS Store, for two years after termination or expiration of the franchise agreement. Excepted from this restriction are any competitive businesses owned by you or an affiliate at the time of termination of the franchise agreement. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 53–64)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, there are specific non-competition covenants that apply if the franchise agreement is prematurely terminated due to franchisee default.
Specifically, if an Aplus franchisee or any owner is in default leading to the premature termination of the franchise agreement, they are restricted from owning, investing in, managing, operating, or consulting with any competitive business within 20 miles of their Aplus store or any other Aplus store. This restriction lasts for two years following the termination or expiration of the franchise agreement.
However, this non-compete restriction does not apply to competitive businesses that the franchisee or an affiliate already owned at the time of the franchise agreement's termination. This exception provides some flexibility for franchisees who may have pre-existing business interests in the same sector.