Under what circumstances will the Aplus Development Agreement terminate before the end of the last Development Period identified in Attachment B?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
provided in the Franchise Agreement under the name APLUS, SUNOCO, or some derivative of the Marks.
2. TERM OF DEVELOPMENT AGREEMENT
- 2.1. Term. Unless sooner terminated, the term ("Term") of this Agreement begins on the Effective Date and, unless otherwise negotiated, terminated, or extended as provided in this Agreement, expires on the earlier of: (a) the date on which you have completed your development obligations under this Agreement, or (b) 12:00 midnight CST on the last day of the last Development Period identified in Attachment B.
- 2.2. Effect of Termination or Expiration. Upon termination or expiration of this Agreement, all territorial protection afforded under this Agreement ends, and you have no further right to develop any Stores for which a Franchise Agreement has not been signed. Termination or expiration of this Agreement does not affect any rights or obligations under any then-existing Franchise Agreement.
3. FEES
- 3.1. Development Fee. Upon execution of this Agreement, you shall pay to Franchisor a Development Fee in the amount set forth in the Summary Page ("Development Fee"). The Development Fee is fully earned by Franchisor when paid and is not refundable, in whole or in part, under any circumstances.
- 3.2. Initial Franchise Fee. For each Franchise Agreement signed under this Agreement, you shall pay to Franchisor an initial franchise fee deposit in the amount set forth in the Summary Page. When you sign a Franchise Agreement for the first Store contemplated under this Agreement, Franchisor will credit a portion of your Development Fee payment to fully satisfy the initial franchise due thereunder.
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, the Development Agreement's term begins on the Effective Date and expires on the earlier of two conditions: when the developer has completed their development obligations, or at 12:00 midnight CST on the last day of the last Development Period identified in Attachment B. However, the agreement can be terminated sooner than these dates.
Specifically, failure to adhere to the Development Schedule, including any approved extensions, or to any time period for developing replacement Stores constitutes a material breach of the Development Agreement. This means Aplus can terminate the agreement early if the franchisee does not meet the agreed-upon development timelines. The franchisee is expected to conduct thorough due diligence, acknowledging they bear the risk of finding suitable locations and the economic viability of developing the planned number of stores within the Development Area.
Additionally, if a franchisee ceases to operate any Aplus store developed under the agreement, they are obligated to develop a replacement store within a reasonable timeframe, not exceeding 180 days. Failure to do so also constitutes a material breach, potentially leading to early termination. However, if the franchisee transfers their interest in a store, that store continues to count towards the Development Schedule as long as it operates as an Aplus store. If the transferred store ceases to operate under the Aplus brand, the franchisee must develop a replacement within 180 days.