Under what circumstances can Sunoco terminate the Aplus lease due to condemnation or eminent domain?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
1.25 Condemnation and Other Interference with Use of Premises
- (A) Should the Premises, in whole or in part, be condemned or otherwise taken pursuant to power of eminent domain, Sunoco may terminate this Lease at any time thereafter upon notice to you.
- (B) You shall have no claim to any portion of a condemnation award payable to Sunoco with respect to Premises; provided, however, you may be entitled to any separate award payable to you by the condemning authority for the taking of your leasehold interest, loss of business opportunity, or good will.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, Sunoco, the lessor, has the right to terminate the lease agreement if the premises are condemned or taken under eminent domain. Specifically, if the property is taken in whole or in part, Sunoco can terminate the lease at any time after the event by providing notice to the franchisee.
This clause protects Sunoco's interests in the event that the government or another entity with eminent domain power takes control of the property. It allows Sunoco to end the lease without penalty, as the taking of the property makes it impossible for the Aplus franchisee to continue operating.
However, the FDD also states that the Aplus franchisee has no claim to any portion of a condemnation award payable to Sunoco regarding the premises. The franchisee may be entitled to a separate award from the condemning authority for the taking of their leasehold interest, loss of business opportunity, or goodwill. This means that while Sunoco can terminate the lease, the franchisee may still be able to recover some compensation directly from the entity that condemned the property.