Under the Aplus Development Agreement, what right is the Franchisor granting to the Developer?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisor hereby grants to you, and you hereby accept, the right and obligation, to develop a specified number of Stores under the Authorized Brands in the Development Area (identified in the Summary Page and Attachment B) within the timeframe set forth in the Development Schedule (identified in $\underline{\text{Attachment B}}$ ). Each Store to be developed shall be developed and operated pursuant to a separate Franchise Agreement in accordance with $\underline{\text{Section 4.1}}$ .
- 1.1.2. This Agreement grants you no right or license to use any of the Marks; your right to operate a Store and license to use the Marks derives solely from the Franchise Agreements that you will enter into under this Agreement.
- 1.1.3. The development rights granted under this Agreement belong solely to you: you may not share them, divide them, sub-franchise or sublicense them, subcontract, assign or delegate, or transfer them, except in accordance with the transfer provisions of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, the Development Agreement grants the developer the right and obligation to develop a specified number of Aplus stores or Sunoco fueling stations within a defined Development Area and timeframe. This is detailed in Section 1.1.1 of the Development Agreement. The specifics of the number of stores, the Development Area, and the timeframe are outlined in the Summary Page and Attachment B of the agreement.
However, this Development Agreement does not grant the developer any rights to use Aplus's trademarks. The right to operate a store and use Aplus's marks comes solely from separate Franchise Agreements that the developer must enter into for each store, as stated in Section 1.1.2. The development rights granted are exclusive to the developer and cannot be shared, divided, sub-franchised, or transferred, except as outlined in the agreement's transfer provisions, according to Section 1.1.3.
In practical terms, this means that while the Development Agreement secures the opportunity to build multiple Aplus locations, each location requires its own individual Franchise Agreement. A prospective developer should carefully review the Development Schedule in Attachment B to understand the required pace of development and the financial and operational conditions that must be met to secure each individual franchise. The developer should also be aware that Aplus retains significant control over the approval of each franchise and can impose its then-current Franchise Agreement terms, which may change over time.