Under what conditions can the Aplus lease be terminated immediately due to assignment or subletting?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
- (A) This Lease shall not be assigned in whole or in part by you nor shall your interest in the Premises or Loaned Equipment be assigned in whole or in part, either voluntarily or by operation of law, except with Sunoco's prior written consent. This Lease shall not be sublet in whole or in part by you nor shall your interest in the Premises or Loaned Equipment be sublet in whole or in part, either voluntarily or by operation of law. Any assignment or attempt to assign without Sunoco's prior written consent or any subletting or attempt to sublet shall result in immediate termination of your interest in and to this Lease, the Premises, and Loaned Equipment.
- (B) For purposes of this Section, reference to "Franchisee" or "Lessee" shall mean you, if you are a sole proprietor; if a partnership, all partners; if a corporation with two shareholders, both shareholders; or if a corporation with more than two shareholders, the majority shareholder named in Part 1 of this Lease. That person must be an officer or director as well as a majority shareholder.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, the Aplus lease can be terminated immediately if the franchisee attempts to assign or sublet the lease without prior written consent from Sunoco. This applies whether the assignment or subletting is voluntary or occurs by operation of law.
This provision is significant for prospective Aplus franchisees because it strictly controls their ability to transfer their leasehold interest. Seeking written consent from Sunoco is not merely a formality; failure to obtain it results in immediate termination of the lease. This could have severe consequences, potentially leading to loss of the business location and associated investments.
For Aplus franchisees structured as partnerships or corporations, the consent requirements extend to changes in ownership. If the franchisee is a sole proprietor, the rule applies to them. If a partnership, all partners must abide by the rule. If a corporation with two shareholders, both shareholders, and if a corporation with more than two shareholders, the majority shareholder named in Part 1 of the Lease, who must also be an officer or director, are subject to these restrictions. This ensures that Sunoco maintains control over who operates at the leased premises.
It is important for potential Aplus franchisees to understand these restrictions and ensure they have a clear plan for managing the lease and any potential future transfers or subleases. They should discuss these terms with a legal advisor to fully understand their rights and obligations under the lease agreement.