Under what condition will Aplus Franchisor have no liability for the performance of any obligations contained in the Franchise Agreement after a transfer?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
This Agreement and all rights and duties hereunder are fully transferable in whole or in part by Franchisor and such rights will inure to the benefit of any person or entity to whom transferred; provided, however, that with respect to any assignment resulting in the subsequent performance by the assignee of the functions of Franchisor, the assignee shall assume the obligations of Franchisor hereunder and Franchisor shall thereafter have no liability for the performance of any obligations contained in this Agreement.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, Aplus can transfer the Franchise Agreement, including all associated rights and responsibilities, to another party. If this transfer results in the assignee taking over Aplus's duties, Aplus will no longer be liable for fulfilling any obligations outlined in the Franchise Agreement. This means that the new party assuming the role of Aplus will be fully responsible for all aspects of the agreement.
For a prospective franchisee, this clause is significant because it clarifies that Aplus can essentially step away from its obligations under the agreement by transferring them to another entity. It is important to note that this transfer does not require the franchisee's consent.
This transfer clause could impact the franchisee if the new assignee does not perform the obligations to the same standard as Aplus. Therefore, a franchisee should carefully consider the implications of this clause and potentially seek legal advice to understand their rights and protections in the event of such a transfer.