Under what conditions can the Aplus Development Agreement term end?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in | Summary | |
|---|---|---|---|
| Development Agreement | |||
| a. Length of the Agreement term | Section 2.1 | The period beginning on the effective date and ending on the earlier of: (i) the date on which you have completed your development obligations, or (ii) 12:00 midnight CST on the last day specified in the development schedule. | |
| b. Renewal or extension of the | No provision | Not applicable. | |
| term | |||
| c. Requirements for Developer | No provision | Not applicable | |
| to renew or extend | |||
| d. Termination by Developer | No provision | Not applicable | |
| e. Termination by the | No provision | Not applicable | |
| franchisor without cause | |||
| f. Termination by the franchisor with “cause” | Sections 9.1, 9.2., 9.3, 9.4, 9.5, and 9.6 | We can terminate if you materially default under your development agreement, an individual franchise agreement, or any other agreement between you or your affiliate and us. In the event of the death or permanent incapacity of an owner, we may terminate if you fail to adhere to the applicable transfer requirements. | |
| g. “Cause” defined - curable defaults | Sections 9.3, 9.4, 9.5, and 9.6 | You have 10 days to cure a failure to pay fees and 30 days to cure any other default, and in the case of a breach or default in the performance of your obligations under any franchise agreement or other agreement between you and us. | |
| h. “Cause” defined – non- curable defaults | Sections 9.1 and 9.2 | Non-curable defaults: unapproved transfers; failure to meet development obligation; any breach of confidentiality or unfair competition described in Section 10; cross defaults, bankruptcy, foreclosure, insolvency, conviction of a felony, misrepresentations in your application, and/or repeated defaults, even if cured. |
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, the Development Agreement term can end under certain conditions, as detailed in Item 17. The agreement's length is defined in Section 2.1, stating that it begins on the effective date and concludes either when the developer fulfills their development obligations or at 12:00 midnight CST on the last day specified in the development schedule, whichever comes first.
Additionally, Aplus can terminate the Development Agreement with cause if the developer materially defaults under the Development Agreement, an individual franchise agreement, or any other agreement between the developer (or an affiliate) and Aplus. In the event of the death or permanent incapacity of an owner, Aplus may terminate the agreement if the applicable transfer requirements are not met.
Furthermore, the FDD outlines both curable and non-curable defaults that can lead to termination. Curable defaults, as defined in Sections 9.3, 9.4, 9.5, and 9.6, include failure to pay fees (which can be cured within 10 days) and any other default (curable within 30 days), including breaches of obligations under any franchise agreement or other agreement with Aplus. Non-curable defaults, as detailed in Sections 9.1 and 9.2, include unapproved transfers, failure to meet development obligations, breaches of confidentiality or unfair competition, cross defaults, bankruptcy, foreclosure, insolvency, conviction of a felony, misrepresentations in the application, and/or repeated defaults, even if previously cured.