Under what conditions can an Aplus Developer transfer franchise agreements signed under the development agreement?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in Development Agreement | Summary | |
|---|---|---|---|
| developer which is a business entity may be offered for sale through the public offering of securities. Shares may be offered by private offering with our prior written consent. | |||
| l. | Franchisor approval of transfer by Developer | Section 8.4 | Transfers require our prior written consent, which may be withheld for any reason, in our sole subjective judgment. However, transfers that do not result in a change of control may, subject to certain conditions described in the development agreement, be comp |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 53–64)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, Aplus requires prior written consent for any transfer of franchise agreements by a developer. This consent can be withheld for any reason, based on Aplus's sole subjective judgment. However, transfers that do not result in a change of control may be permissible, provided certain conditions outlined in the development agreement are met.
This means that if a developer wants to transfer their rights or obligations under the development agreement, they must first obtain Aplus's approval. Aplus has broad discretion in deciding whether to grant this approval. This protects Aplus by allowing them to carefully vet potential new developers and ensure they meet the company's standards.
The exception to this rule is for transfers that do not result in a change of control. These types of transfers may be allowed if the developer meets specific conditions detailed in the development agreement. A prospective Aplus developer should carefully review the development agreement to understand what these conditions are.
It is important for potential Aplus developers to understand the transfer restrictions and conditions, as failure to comply with them could result in a breach of the development agreement. Developers should seek legal counsel to fully understand their rights and obligations regarding transfers.