Under what circumstances can Sunoco terminate the Aplus lease due to 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 has the right to terminate the lease agreement if the premises are condemned or taken, either in whole or in part, through the power of eminent domain. This means that if a government entity or other authorized body takes the property for public use, Sunoco can end the lease by providing notice to the franchisee.
This provision protects Sunoco's interests in the event that the property is no longer available for use as an Aplus franchise due to governmental action. It allows Sunoco to terminate the lease without penalty, as the taking of the property is beyond their control.
However, the franchisee is not entirely without recourse. While the franchisee has no claim to any condemnation award payable to Sunoco for the property itself, the franchisee may be entitled to a separate award from the condemning authority. This separate award could compensate the franchisee for the loss of their leasehold interest, business opportunities, or goodwill associated with the Aplus franchise at that location. It is important for prospective franchisees to understand their rights in such a situation and to seek legal counsel if necessary to protect their interests.