Under what conditions can an Aplus franchisee terminate the franchise agreement if Aplus materially breaches the agreement and fails to cure the breach within 30 days?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
[Item 23: RECEIPT]
16.3. Termination by Franchisee
If Franchisee is in full compliance with all of the terms of this Agreement and Franchisor materially breaches this Agreement and fails to commence reasonable efforts to cure such breach within thirty (30) days after receiving written notice identifying the claimed breach, Franchisee may elect to terminate this Agreement unless the breach cannot reasonably be cured within such thirty (30) days. If the breach cannot reasonably be cured in such thirty (30) days, Franchisee may elect to terminate this Agreement only if Franchisor does not promptly undertake and continue efforts to cure such material breach within a reasonable period of time and furnish Franchisee reasonable proof of such efforts.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, a franchisee can terminate the franchise agreement if Aplus materially breaches the agreement. However, the franchisee must be in full compliance with all terms of the agreement themselves.
The franchisee must provide Aplus with written notice identifying the breach. Aplus then has 30 days to commence reasonable efforts to cure the breach. If the breach cannot be reasonably cured within 30 days, the franchisee can only terminate the agreement if Aplus does not promptly undertake and continue efforts to cure the breach within a reasonable period and furnish reasonable proof of such efforts.
This means that a franchisee cannot immediately terminate the agreement, even if Aplus is in material breach. The franchisee must provide Aplus with an opportunity to fix the problem, and can only terminate the agreement if Aplus fails to make reasonable efforts to do so. This clause protects Aplus from immediate termination for breaches that may be complex or time-consuming to resolve, while still providing the franchisee with a way out if Aplus does not take the breach seriously.