Under what conditions can Aplus terminate the franchise agreement with notice but without an opportunity for the franchisee to cure the default?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
- 9.2.
Termination with Notice and Without Opportunity to Cure.
Franchisor has the right to terminate this Agreement, which termination will become effective upon delivery of notice without opportunity to cure if: (a) you fail to meet the Development Schedule; (b) you or any Owner is convicted of, or pleads no contest to, a felony, a crime involving moral turpitude, or any other crime or offense that Franchisor believes is reasonably likely to have an adverse effect on the System; (c) there is any transfer or attempted transfer in violation of Article 8 of this Agreement; (d) you or any Owner fails to comply with the confidentiality or non-compete covenants in Article 6 and Article 10 of this Agreement; (e) you or any Owner has made any material misrepresentations in connection with your developer application; (f) Franchisor delivers to you two or more written notices of default pursuant to this Article 9 within any rolling 12-month period, whether or not the defaults described in such notices ultimately are cured; or and (g) violate the non-disparagement requirements pursuant to Section 5.3. above.
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, Aplus can terminate the franchise agreement with notice but without giving the franchisee an opportunity to cure the default under specific circumstances. These circumstances include failing to meet the Development Schedule, which outlines the timeline for opening new Aplus stores.
Additionally, Aplus can terminate the agreement without a cure period if the franchisee or any owner is convicted of a felony, a crime involving moral turpitude, or any other crime that Aplus believes could negatively impact the Aplus system. Transferring or attempting to transfer the franchise in violation of the agreement, failing to comply with confidentiality or non-compete agreements, or making material misrepresentations in the franchise application are also grounds for termination without a cure period.
Finally, Aplus can terminate the agreement without opportunity to cure if Aplus delivers two or more written notices of default to the franchisee within a 12-month period, regardless of whether the defaults were ultimately cured. Violating the non-disparagement requirements is also grounds for termination without opportunity to cure. These terms highlight the importance of compliance with the franchise agreement and adherence to Aplus's standards to avoid immediate termination.