Under what condition can Aplus terminate the Franchise Agreement if the Designated Manager does not satisfactorily complete the training program?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
- 16.2.1. The following constitute incurable defaults under the Franchise Agreement. If any of the following occur, Franchisor shall have the right to terminate this Agreement, without providing Franchisee an opportunity to cure. Termination shall be effective upon delivery of notice of termination.
- (b) Franchisee fails to have its Designated Manager satisfactorily complete any training program pursuant to Section 8;
If Franchisor determines that the Designated Manager is unable to satisfactorily complete the training program described above, Franchisor has the unrestricted right to terminate this Agreement. If Franchisee is a business entity and the Designated Manager fails to complete the initial training program to Franchisor's reasonable satisfaction, Franchisee may be permitted to select a substitute manager and such substitute manager must complete the initial training to Franchisor's satisfaction. Additionally, if Franchisee replaces its Designated Manager, or brings new principals into the franchise, the new Designated Manager and principals must attend Franchisor's initial training program, or train with a franchisee who agrees to provide such training. Franchisee will be required to pay Franchisor's then-current rates for additional training, presently $1,000 per week. Franchisor shall also charge the then-current rates for additional training, presently $1,000 per week, for each additional attendee over the three (pursuant to Section 8.1 above) who need to attend training or any remedial training provided to individuals already trained. Franchisee shall bear the cost of the employee's training, including but not limited to, the required fee, wages, transportation, lodging, and meals.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, Aplus has the right to terminate the Franchise Agreement if the Designated Manager does not satisfactorily complete the training program. This is considered an incurable default, meaning Aplus does not have to provide an opportunity to correct the issue. Termination is effective immediately upon delivery of the termination notice. However, if the franchisee is a business entity, they may be allowed to select a substitute manager who must then complete the initial training to Aplus's satisfaction.
This condition highlights the critical importance Aplus places on its training program and the competence of the Designated Manager. For a prospective franchisee, this means ensuring that the individual chosen as the Designated Manager is fully capable and committed to completing the training successfully. Failure to do so can result in the immediate termination of the franchise agreement, representing a significant financial and operational risk.
Furthermore, if a franchisee replaces their Designated Manager or brings in new principals, these individuals must also attend the initial training program. Aplus charges for additional training at the then-current rates, which are presently $1,000 per week. The franchisee is responsible for all costs associated with the employee's training, including fees, wages, transportation, lodging, and meals. This underscores the ongoing investment required to maintain properly trained personnel within the Aplus franchise system.